Elizabeth Warren hinted at this last week when Richard Cordray was named as the nominee to run the Consumer Financial Protection Bureau, but now it’s official – she will leave her position as a counselor to Treasury and Assistant to the President on August 1. And rather than Cordray, the nominee and the current head of enforcement at CFPB, taking over, Raj Date will manage day-to-day operations until there’s a director.
Elizabeth Warren, the law professor who persuaded the Obama administration to create the Consumer Financial Protection Bureau, will step down on August 1 from her role setting up the controversial new regulator, the Treasury said on Tuesday.
Warren will return to Harvard Law School and will be succeeded by a close aide and former banker, Rajeev Date [...]
Warren had been setting up the agency as a special advisor to Treasury Secretary Timothy Geithner. Date will now assume that role and run the bureau’s day to day operations, the Treasury Department said.
Geithner said in a statement that Warren had done an extraordinary job in getting the bureau running.
“Her efforts to simplify mortgage and credit card disclosures, protect military families from abusive and deceptive financial practices, and bring aboard top talent like Richard Cordray and Raj Date have built a strong foundation for the Bureau’s future success.”
This essentially means that Date is running CFPB until Obama makes a recess appointment. Senate Republicans have vowed never to confirm Cordray, or anyone else for that matter, until the agency is gutted. So Date’s in charge. Warren has stressed that CFPB is very decentralized, with a lot of responsibility below the director, so Date won’t necessarily be able to micromanage. But we shall see about that. Right now, you have an agency unable to enforce non-bank financial institutions, with an acting director who some in the consumer protection community have questions about.
This comes at a time when the foreclosure fraud settlement has reached a granular level, with the banks arguing with one another over how much they’re going to have to pay. CFPB would have a role in getting to a final settlement and particularly in enforcing the mortgage servicers, which it has primary oversight for at the moment. Of course, with states dropping out left and right, who knows if there will even be an enforceable settlement.
As for Warren, she’s headed to Legoland with her grand-daughter, and then Harvard Law, and will make any decisions on the Massachusetts Senate race after that.