Elizabeth Warren will exit the Consumer Financial Protection Bureau before it officially launches, according to a single-sourced Bloomberg report last night. According to an unnamed “briefed” person, Obama will dump the controversial Warren for someone already working at the CFPB, and the announcement will come next week:
Elizabeth Warren, a Harvard professor, was appointed last fall by Obama to set up the consumer bureau until a director was named. Warren previously was head of the congressional watchdog panel overseeing the bank bailout.
This was one of those “temporary” assignments that an administration would eventually make permanent. Warren, however, became a lightning rod not just for her approach to the CFPB but also for her interaction with Congress. Called to testify in May, Warren insisted that the panel limit its questioning because of a prior engagement on her schedule. The prior engagements appear to have been a couple of internal meetings — and an interview with Vanity Fair.
With Congressional relations off to that kind of start, it’s no wonder that Republicans in the Senate have already made clear that they wouldn’t allow Warren to be confirmed:
The consumer bureau, which is to begin formal operations on July 21, was established by the 2010 Dodd-Frank financial- regulatory overhaul to fill what lawmakers said was a gap in oversight of products whose abuse contributed to the 2008 credit crisis, including mortgages and credit cards.
The bureau’s director requires confirmation by the Senate. After 44 Republican senators announced in May that they wouldn’t vote to approve any candidate to run the bureau without changes in its structure, analysts said the White House might have to resort to a temporary appointment during a congressional recess. Sixty of the 100 senators are effectively required to vote for a nomination due to procedural rules.
It’s no surprise that Obama wants to look for a replacement for his lightning-rod initial choice, especially after Warren’s appearance at the House Oversight and Government Reform Committee this week. Democrats tried distracting the committee by loudly demanding that Darrell Issa subpoena executives from large banks, but Issa instead focused on Warren and the ambiguous limitations on the CFPB’s power:
The hearing, called “Consumer Financial Protection Efforts: Answers Needed,” was supposed to look at the powers of the agency, which many Republicans hold in deep mistrust.
Issa, who said he wasn’t out to “micromanage” the bureau, which is housed in the Federal Reserve, but said he wanted to see if the agency was “properly designed and prepared.”
“The Federal Reserve is not transparent,” Issa said. “The Federal Reserve does resist any kind of congressional oversight and considers it unreasonable interference.” …
McHenry, on Thursday, said he wanted to know more about the types of financial products the bureau would target – insisting that those moves would cause uncertainty for investors and business leaders.
“I fear the actions by the Consumer Financial Protection Bureau that limit access to credit … would only further damage this troubling economy,” he said.
Bloomberg only offers the one, anonymous source for this story, which seems a little unusual — and weak. Under the circumstances, the decision wouldn’t be a surprise, but normally media outlets like a second source before publication. Either they trust this particular source more than most, or Bloomberg figures it’s inevitable anyway.