Raj Date, who has already been hired to work as associate director of research, markets and regulations for the Consumer Financial Protection Bureau, is being eyed for a promotion to director, according to multiple reports today. Date would have to agree to leapfrog his close colleague, Elizabeth Warren, and take the job. Other candidates have been reluctant to do this.
Warren has become a lightning rod for criticism from Republicans, and the White House hopes Date’s decade of financial experience working with Capital One and Deustche Bank will make him a more palatable nominee, the person said. Bloomberg first reported the news [...]
The White House has struggled to find the right candidate to run the consumer watchdog, a critical component of the financial regulatory overhaul Congress passed last summer. Warren is credited with coming up with the idea for the bureau, and she has been Democrats’ top pick for the job. But the Senate must confirm any nominee, and Republicans have vowed to block any pick unless the agency’s structure is changed.
Nominating Date could test that resolve. His financial credentials could fend off questions of whether someone such as Warren who has never worked in the industry could fairly regulate it. But Date also has a track record of consumer advocacy that should appease Democrats.
Calling Date an “ex-banker”, as Bloomberg did in its report, is pretty misleading. Date’s credentials during the financial reform debate were pretty impeccable, and he has been a close adviser to Warren on CFPB throughout, sharing the goals of the agency. If his work at Capital One and Deutsche Bank (where he repeatedly warned about the rise of the housing bubble) helps him get the job, fine. But I don’t think it’ll really fool Republicans into thinking this is a bank-friendly sycophant.
Warren could potentially give her blessing to this arrangement, which would possibly include her staying on in the Administration as a counselor. But nobody’s quoting her, and she’s not talking yet. Regardless of whether the nominee is Warren, Date, or a schnauzer who responds to Jamie Dimon by barking “Yes!”, Senate Republicans have vowed to filibuster. They don’t want the CFPB to exist. There was a threatened vote just yesterday to eliminate or curtail CFPB. So the idea that Republicans will ever relent here is fanciful.
That’s why progressives in and out of Congress and, just today, the AFL-CIO, have urged a recess appointment for Warren, since a recess appointment would be needed to get a director in place anyway. There’s a question of whether the Senate GOP can block adjournment to stop the possibility of a recess appointment, but it can be enacted by majority vote. The House would have to agree on an adjournment, but they have expressed reluctance to mess with the upper chamber’s adjournment procedures, lest the Senate mess with theirs. So adjournment can happen, if the White House signals that one is needed for recess appointments. And that would be necessary if any CFPB Director is to be installed before July 21. On that date, CFPB moves to the Federal Reserve, and without a Director, CFPB loses its ability to regulate nonbank financial institutions.
I think Date would be a good CFPB Director. I think Warren would be better. And neither can happen without a recess appointment.
UPDATE: Yves Smith thinks Date is “perfectly capable in a technocratic way. But he’s not Warren.” He’s worked pretty extensively with Warren. Smith is also not totally correct that “any regulatory measures are subject to the approval of the Financial Stability Oversight Counsel”; under current rules FSOC would need an affirmative 2/3 vote to stop any CFPB rule, which is different than approving every rule.
UPDATE II: Robert Borosage of the Campaign for America’s Future comes out strongly against a Date appointment:
“This trial balloon won’t get off the ground. Every consumer activist, every informed citizen, an army of commentators, bloggers, organizers and opinion leaders will be simply outraged if Elizabeth Warren is not nominated to head the bureau that she conceived, championed and constructed.
“The Warren test cannot be ducked. If the president names someone else, he gets the worst of both worlds. The Republicans will still block the nomination, demanding that the bureau be neutered. And the White House will be savaged across the progressive community for demonstrating once more that it caters far more to bankers than to the customers who are too often their victims.
“It really is simple. Name the best person to the job. Take on the fight. Help Americans understand who is on their side. No excuses. No dodges. There are no acceptable alternatives. Elizabeth Warren has demonstrated her leadership, her independence, her loyalty. This is not a hard test.”