I have nothing but unqualified praise for this trial balloon from the White House:

The White House is considering appointing Elizabeth Warren as interim head of the Consumer Financial Protection Bureau, bypassing a likely Senate confirmation battle, according to sources.

Under the Dodd-Frank regulatory reform law signed July 21, the Treasury Department has the power to appoint a temporary head of the new agency until a permanent one is nominated and confirmed.

By naming Warren interim head, the White House would sidestep — for now — a likely fight over her nomination. Obama can still choose to formally nominate Warren sometime next year, or select another candidate if she becomes too polarizing.

Warren supporters are urging the White House to make the appointment quickly, which would give the Harvard professor time and authority to get the new agency running.

“We would like the appointment fast-tracked because of the need to establish the bureau and set standards for the industry,” said David Berenbaum, chief program officer for the National Community Reinvestment Coalition.

As the story notes, this is written into the Dodd-Frank law. Treasury gets to set up the CFPB before it transitions into the Federal Reserve, and the interim director of the agency they name can get started right away without Senate confirmation. And he or she can hold the office indefinitely, or until the President gets a nominee confirmed for the post.

I don’t expect Warren to just become a permanent interim director. But with her in place and making the rules for the various industries to follow, she would have less of a problem with confirmation if nominated. I wouldn’t read too much into the “if she becomes too polarizing” phrase in the excerpt – this is coming from American Banker, after all. Similarly, the only people warning against an interim appointment, with vague claims about it carrying baggage and undercutting her effectiveness, are industry lobbyists and former Republican aides.

What’s more, the White House has basically encouraged this speculation. An anonymous source told the Huffington Post that this possibility was under consideration.

Warren could serve until Obama nominates a permanent director — a nomination he’s not required to make, meaning that Warren could serve indefinitely with the full powers of the director. Obama could follow the interim nomination by later naming Warren as the permanent director, giving the Senate an opportunity to debate her selection. The ability of the administration to nominate an acting director indefinitely, avoiding a lengthy confirmation battle, was first reported by HuffPost’s Shahien Nasiripour in July. American Banker is also reporting that Warren is under consideration for the interim position. White House spokeswoman Amy Brundage tells us: “Elizabeth Warren has been a stalwart voice for American consumers and families and she was the architect of the idea that became the Consumer Financial Protection Bureau. The President will have more to say about the agency and its mission soon.”

This is a solid idea from a White House that seems to know they have nothing to lose by this appointment. They’ve been pounding on Republican obstruction of Presidential nominees for so long, they could hardly want for ammunition if the GOP decided to whine about being cut out of the process. Plus, the appointment of Don Berwick to the Centers for Medicare and Medicaid Services caused barely a ripple of controversy. There’s just no good reason not to do this. I’m glad they’re moving in that direction.

UPDATE: Sewell Chan at the NYT confirms. To be clear, it seems this interim appointment would mainly be operative until Treasury transfers the CFPB to the Fed, which would be July 2012 at the latest. I think the best option is a simultaneous nomination and interim appointment to put pressure on the GOP for confirmation.