Elizabeth Warren should thank the GOP.

How to protect your pockets.
March 24 2011 7:30 PM

The Vetting

How the Republicans cleared Elizabeth Warren's path.

Elizabeth Warren. Click image to expand.
Elizabeth Warren

I have no idea whether President Obama plans to nominate Elizabeth Warren as director of the Consumer Financial Protection Bureau. If you'd asked me a year ago whether he should, I'd have probably said no, on the grounds that she was too much of a lightning rod. Better to install somebody with a lower profile who can get confirmed, I'd have argued. And, besides (as I wrote in September), she had no real management experience.

Now I think Obama should nominate Warren. Partly that's because Warren, in her six months as de facto CFPB director (ahem, I mean "special adviser to the secretary of the treasury and assistant to the president") has demonstrated sufficient political and managerial skills (inasmuch as anyone can demonstrate such skills while running an agency that hasn't actually done anything yet). But mostly it's because Republicans have talked me into it.

Advertisement

On July 21, seven federal agencies will transfer their regulatory authority to the CFPB. Even if President Obama were immediately to nominate Jesus Christ to be CFPB director, the Prince of Peace likely couldn't win Senate confirmation in the space of four months. That makes it virtually certain Warren will continue to preside over the CFPB as de facto director once it's empowered to issue regulations. Warren may even issue some. According to a letter from the Inspectors General of the Treasury department and the Federal Reserve, a leaderless CFPB is permitted, via Treasury Secretary Tim Geithner (Warren's boss), to exercise whatever regulatory authority existed elsewhere in the government before passage of the Dodd-Frank financial reform bill, which created the CFPB. A leaderless CFPB is not, however, permitted to exercise whatever new regulatory authority was created under Dodd-Frank.

In practice, this means that after July 21 Warren can issue rules governing banks, but she can't issue rules governing nonbank mortgage originators (whose lack of government oversight helped crash the financial system in 2008). That won't be an ideal situation for anybody. Republicans and the banks will be angry that the unconfirmed Warren is able to regulate banks, while Democrats and consumer groups will be angry that Warren is unable to regulate nonbanks. Clearly, it will be in everybody's interest that a new director be installed as soon after July 21 as is humanly possible.

Will President Obama give Warren the nod? Depends on whom you ask. The U.S. Chamber of Commerce's "CFPB Spotlight" said last week that Warren was "likely to get the nomination." But Rep. Barney Frank, D.-Mass., asked about Warren's chances a few days later, said "I think the president is too unwilling to make the kind of fight that you don't necessarily win." The Chamber doesn't want Warren to get the nomination; Frank very much does. The administration reportedly approached former Michigan Gov. Jennifer Granholm about the job, but she said no. Former Ohio Gov. Ted Strickland was said to be under consideration, but he told Bloomberg News that he hadn't been contacted about it. Former Treasury official Michael Barr, who was under consideration for the job last summer, took himself out of the running.

TODAY IN SLATE

Politics

The Democrats’ War at Home

How can the president’s party defend itself from the president’s foreign policy blunders?

Congress’ Public Shaming of the Secret Service Was Political Grandstanding at Its Best

Michigan’s Tradition of Football “Toughness” Needs to Go—Starting With Coach Hoke

A Plentiful, Renewable Resource That America Keeps Overlooking

Animal manure.

Windows 8 Was So Bad That Microsoft Will Skip Straight to Windows 10

Politics

Cringing. Ducking. Mumbling.

How GOP candidates react whenever someone brings up reproductive rights or gay marriage.

Building a Better Workplace

You Deserve a Pre-cation

The smartest job perk you’ve never heard of.

Hasbro Is Cracking Down on Scrabble Players Who Turn Its Official Word List Into Popular Apps

Florida State’s New President Is Underqualified and Mistrusted. He Just Might Save the University.

  News & Politics
Politics
Sept. 30 2014 9:33 PM Political Theater With a Purpose Darrell Issa’s public shaming of the head of the Secret Service was congressional grandstanding at its best.
  Business
Moneybox
Sept. 30 2014 7:02 PM At Long Last, eBay Sets PayPal Free
  Life
Gaming
Sept. 30 2014 7:35 PM Who Owns Scrabble’s Word List? Hasbro says the list of playable words belongs to the company. Players beg to differ.
  Double X
The XX Factor
Sept. 30 2014 12:34 PM Parents, Get Your Teenage Daughters the IUD
  Slate Plus
Behind the Scenes
Sept. 30 2014 3:21 PM Meet Jordan Weissmann Five questions with Slate’s senior business and economics correspondent.
  Arts
Brow Beat
Sept. 30 2014 8:54 PM Bette Davis Talks Gender Roles in a Delightful, Animated Interview From 1963
  Technology
Future Tense
Sept. 30 2014 7:00 PM There’s Going to Be a Live-Action Tetris Movie for Some Reason
  Health & Science
Medical Examiner
Sept. 30 2014 11:51 PM Should You Freeze Your Eggs? An egg freezing party is not a great place to find answers to this or other questions.
  Sports
Sports Nut
Sept. 30 2014 5:54 PM Goodbye, Tough Guy It’s time for Michigan to fire its toughness-obsessed coach, Brady Hoke.