Once President Obama signs Wall Street reform into law, the battle
will move off the front pages, but it'll be far from over. Who the
president picks to lead key agencies and commissions will determine the
course and strength of those regulatory bodies, much as Joe Kennedy
shaped a half century of tough financial industry regulations by setting
the tone as the first head of the Securities and Exchange Commission.
Two positions are being watched closely by both sides: A new head of
the Office of the Comptroller of the Currency (OCC) and the first head
of the Consumer Financial Protection Bureau (CFPB).
Regardless of the regulator Obama picks to run OCC, banks will be
losing one of their best friends. John Dugan consistently fought to
protect banks from regulation, compiling a record of fealty to Wall Street
impressive even by Bush-era standards. His term expires in August.
At the CFPB, Wall Street and the GOP have been working to prevent
Elizabeth Warren from assuming the helm long before the body had been
created. An amendment pushed by House Republicans in the Financial
Services Committee was intended specifically to eliminate the
possibility of her leading the agency.
It failed and Warren, a Harvard professor and the intellectual mother
of the bureau, has the strong backing of committee chairman Barney
Frank (D-Mass.), as well as Rep. Brad Miller (D-N.C.), who led the push
in the House for tighter consumer protections in the mortgage lending
industry. Many consumer advocates would view any appointment other than
Warren as a disappointment.
"We wouldn't have had a financial crisis if the supposed watchdogs
hadn't been ventriloquists' dummies for the banks. The CFPB is a huge
win for consumers, but it will have been a waste of time if the CFPB is
just one more agency controlled by the banks," Miller told HuffPost. "We
need someone to head the CFPB who is smart, tough and
independent-minded. Professor Warren fits the bill."
In its write-up of possible CFPB heads, the trade paper American
Banker mentioned Warren first, followed by Michael Barr and Eric
Stein, both senior Treasury officials, as well as Fed official Allen
Fishbein, who focuses on consumer issues, and Ellen Seidman, a former
regulator at the Office of Thrift Supervision and now a banker.
Barr was a lead Treasury negotiator during the crafting of Wall
Street reform deliberations. His policy portfolio, where he focuses on
financial institutions, makes him an apparently more suitable pick for
the OCC than the CFPB.
Wall Street wouldn't be happy if he wound up at either body. Though
he is viewed with some suspicion in progressive circles for having
served as a special assistant to former Treasury Secretary Robert Rubin,
Barr has reportedly earned the enmity of the Wall Street lobbyists, who
say he refuses to take their phone calls. His economic research has
focused on the relationship between Wall Street and low- and
middle-income Americans. In 2009, he co-edited the book "Insufficient
Funds: Savings, Assets, Credit, and Banking Among Low-Income Families."
If Obama chooses someone other than Barr to lead OCC, that makes Barr
a leading candidate for CFPB, damaging Warren's chances. A Treasury
spokesman declined to comment on the speculation, as did Warren.
In the Wall Street Journal's speculation about
CFPB leadership, Warren is again mentioned first, followed -- again --
The WSJ also suggests as potential candidates Martha
Coakley, the Massachusetts attorney general who theatrically lost her
bid for the U.S. Senate in January. Lisa Madigan, the Illinois attorney
general, and Lori Swanson, Minnesota's top cop, are mentioned, as are
Susan Wachter and Nicolas Retsinas, academics with government
Coakley, however, thinks Warren would be the right pick. "I think,
frankly, that Elizabeth Warren would be a terrific head of that agency,"
she said on Fox Business when asked if she herself
would be interested in the gig. "She's thought a lot about the consumer
Madigan, too, declined to be considered and threw her weight behind
Warren. "Not only was it [Warren's] idea to create the Consumer
Financial Protection Bureau, but she has long understood the need for
such an agency to ensure that another financial crisis doesn't devastate
the futures of millions of hardworking Americans," Madigan said in a statement.
Warren has distinguished herself over the past year and a half as the
head of the Congressional Oversight Panel, the bailout watchdog, which
earned her bipartisan praise.