I remember a spirited fight among some writers on the left that debated whether the Treasury Department supported or did not support structural, fundamental changes in the FinReg bill (soon to be FinReg law). Mike Konczal and others said “absolutely not,” while Tim Fernholz and others said “sure they did!” Typically, the Fernholz faction would use the Consumer Financial Protection Bureau, a major structural change, as an example of Treasury’s support. The Treasury Department and the Obama Administration supported the CFPB throughout – though it’s worth mentioning that they vociferously opposed carving out auto dealers from the consumer protections, and that made it into the bill anyway.
But if the Treasury Department was so insistent on the CFPB, you’d think they’d want the most qualified person for the job running it – indeed, the person who came up with the idea. But that’s where you’d be wrong.
Treasury Secretary Timothy Geithner has expressed opposition to the possible nomination of Elizabeth Warren to head the Consumer Financial Protection Bureau, according to a source with knowledge of Geithner’s views [...]
Warren, a professor at Harvard Law School whose 2007 journal article advocating the creation of such an agency inspired policymakers to enact it into law, has rocketed to prominence since the onset of the financial crisis as one of the leading reform advocates fighting on behalf of American taxpayers.
Yet while her work on behalf of a federal unit designed solely to protect borrowers from abusive lenders has been embraced by the administration, Warren’s role as a bailout watchdog led to strained relations with the agency her panel has taken to task with brutal reports every month since Obama took office: Geithner’s Treasury Department.
It’s no secret the watchdog and the Treasury Secretary have had a tenuous relationship. Geithner’s critics have enjoyed watching Warren question him during his four appearances before her panel. Her tough, probing questions on the Wall Street bailout and his role in it — often delivered with a smile — are featured on YouTube. One video is headlined “Elizabeth Warren Makes Timmy Geithner Squirm.”
Boy, and bloggers are called the immature ones. Geithner gets his fee-fees hurt because Warren dares to tell the truth about the Wall Street cartel and the woefully inadequate job Treasury has done, particularly on the foreclosure crisis, and so that makes her unacceptable for a position she literally dreamed up. I think it’s time to end the fiction that the Treasury Department is in any way interested in fundamentally changing the balance of power between Wall Street and consumers. If this report is correct, Geithner is using his power to block someone who would actually make Wall Street nervous from having a position of authority.
At least one progressive group is already fighting back. The Progressive Change Campaign Committee has blasted an email to their supporters demanding that Warren be named the head of the CFPB.
As a Harvard professor, her credentials are impeccable. And she was the one who came up with the idea for the Consumer Financial Protection Bureau — perhaps the best piece of this bill — in the first place.
In short, Warren is perfect for the position and most financial insiders have just assumed she would get it. That’s why it’s so outrageous that Geithner — a longtime Wall Street insider — would attempt to sabotage her appointment.
I will be in a position to gather more information about this in the near future, not only from Treasury, but from Elizabeth Warren. It turns out I’m on a panel with her next week at Netroots Nation. We’ll talk about the Forgotten Foreclosure Crisis along with Sen. Jeff Merkley and the Huffington Post’s Ryan Grim. So if you’re in Vegas, please come out as I speak with the next head of the Consumer Financial Protection Bureau – unless Timmeh has something to say about it.