Despite the outpouring of support for bailout watchdog Elizabeth
Warren's candidacy to lead a new consumer protection agency, one
prominent Democrat continues to publicly stand in her way: Senate
Banking Committee Chairman Christopher Dodd.
The Connecticut Democrat, who has lambasted lenders for taking
advantage of cash-strapped borrowers and bank regulators for their poor
record in protecting consumers, led the effort to get the
recently-enacted financial reform law through Congress. The agency it
calls for -- a unit specifically charged with protecting borrowers from
predatory lenders -- survived attacks by the financial services industry
and Republicans. It's now hailed as one of the Obama administration's
But now that the fight has shifted from the creation of the agency to
who's going to lead it, Dodd's role seems to have reversed, say some
financial reform advocates -- rather than fighting for the toughest
possible advocate to fight for consumers and families, he's openly
doubting the wisdom of that selection. And it's not clear whether the
two have even had a meeting in the last year.
Elizabeth Warren, a Harvard Law professor with an expertise in
bankruptcy and consumer finances, came up with the idea for the agency
in a 2007 article. Courted by Congressional Democrats and the White
House, she's served as the public face of the campaign to get the idea
enacted into law. And since the fall of 2008 she's led the Congressional
Oversight Panel, a watchdog agency keeping tabs on the government's
massive bailout of the financial and auto industries.
More than 60 members of Congress and a dozen-plus senators have urged
President Barack Obama to nominate Warren for the consumer post,
including House Financial Services Committee Chairman Barney Frank. So
have the country's largest unions, consumer advocacy groups, law school
professors, and a handful of Republicans. Other than Dodd, not a single
Democrat in national politics has publicly objected to her nomination.
Dodd has said that there are questions about whether the Senate would
confirm her. Warren would have to garner 60 votes to end a filibuster
before the Senate could give her nomination an up-or-down vote.
He's also raised questions about her management experience, pressing
that whomever is chosen to lead the new agency will need certain skills
to navigate the tough bureaucratic battles sure to ensue when the
consumer regulator tries to restrict a certain type of loan, for
Supporters have knocked back those criticisms. The White House says
she's "very confirmable", and Ann Brown, a former chairwoman of the U.S.
Consumer Product Safety Commission, dismissed the management critique,
arguing in an op-ed
that successful agency heads routinely lack experience running large
bureaucracies. Industry-friendly candidates are never questioned on this
point, Brown said. Intellect matters, she argued -- not bureaucratic
But Dodd persists. In interviews with Bloomberg News, Dow Jones,
TPMDC and others, Dodd reiterates that she's qualified, but that there
are questions about whether the Senate would confirm her.
Some involved in the legislative effort to get the bill through
Congress point to Warren's aggressive advocacy on behalf of the new
agency as a sore point between the two.
For months, Dodd tried to garner bipartisan support for the bill,
trying to win the support of Sen. Richard Shelby, an Alabaman and the
top Republican on the banking committee, and Sen. Bob Corker, a
Tennessee Republican on the committee.
But every time word leaked that Dodd was potentially softening his
position for a tough new consumer agency, Warren publicly pushed back.
In December, members of Dodd's staff met with consumer groups and
told them to prepare backup plans in case an independent consumer agency
didn't emerge from the process. What was the least they'd support, the
consumer advocates were asked. Frantic e-mails and conference calls
ensued as advocates worried that the agency -- a centerpiece of the
legislation -- was in doubt.
In January, after the Wall Street Journal reported that Dodd was looking to scrap the idea of an independent agency, Warren penned a letter
to supporters urging them to fight. "The next few weeks will determine
whether our hard work will make a difference for families or whether
families will lose once again," she wrote.
In March, after news reports indicated that Dodd was looking to place
the new agency inside the Federal Reserve -- its ultimate location --
consumer advocates worried that the new regulator's independence would
be in question. In an interview with the Huffington Post,
Warren again made the fight one between banks and families, arguing
that her "first choice is a strong consumer agency. My second choice is
no agency at all and plenty of blood and teeth left on the floor."
A Dodd spokesman noted that the Connecticut Democrat was trying to
pass the toughest legislation that would survive a Republican
filibuster. Dodd also thinks very highly of Warren, the aide said, and
met with her several times throughout the legislative process.
Other sources disputed the characterization.
"It's not a well-kept secret that they don't have a close
relationship or confer with each other," one consumer advocate said.
"Whenever Dodd locked himself in negotiations with the Republicans over
the independence of the consumer agency, she led the charge in public to
keep it intact and to preserve the president's agenda. I'm sure that
ruffled some feathers."
As HuffPost reported in March,
the two haven't met to discuss the financial reform effort or the new
agency since July 2008. The Dodd spokesman couldn't provide the specific
date of their last meeting and volunteered that Dodd never turned down a
meeting request from Warren.
A spokesman for Warren declined to comment.
Consumer advocates praise Dodd for his recent effort to get the
consumer agency through the Senate. But that effort could be undermined
if a tough new regulator isn't picked to lead the agency, they note.
Senate aides say that Dodd's public position on Warren's
confirmability mirrors that of the Treasury Department. A top Treasury
official, Michael Barr, is among three candidates the White House has
identified as potential picks. HuffPost reported last month that
Treasury Secretary Timothy Geithner has expressed opposition to a Warren
Treasury officials had told at least one senator's office that Warren
wasn't confirmable in an effort to sway the senator's views, according
to two Senate aides. A senior administration official said that doesn't
represent Treasury's views.
Dodd's recent advocacy against Warren isn't the first time he's found himself in reformers' crosshairs.
Dodd isn't up for reelection. Other than post-Senate employers, he
doesn't have to worry about waging another public campaign and fighting
for dollars and votes.
Since his last Senate election in 2004, Dodd has raised about $28.3
million, according to an analysis of federal campaign records by the
nonpartisan, Washington-based Center for Responsive Politics. About $13
million of that, or 46 percent, has come from the financial services and
real estate industries. That's nearly four times as much as any other
individual sector has given to Dodd.
As the chairman of the banking committee and a senator from a state
that houses Wall Streeters and big insurance companies, Dodd has long
been associated with the financial services industry.
During his time on the committee, it rarely exercised the kind of
tough Congressional oversight that federal agencies fear. Beginning in
2007 under Dodd's chairmanship, the committee began to hold hearings on
abusive lending and the mounting subprime crisis. By then, it was too
Which is what made his advocacy for the consumer unit so unique,
those involved in the fight say, and what makes his current position on
Warren so disappointing, they argue.
Frank told HuffPost
that if the questions surrounding Warren's confirmability are real,
then Obama should simply give Warren a recess appointment while Senators
are out of town.
The effort to get Warren nominated even compelled Dr. Phil McGraw, a television personality better known as Dr. Phil, to write an op-ed on his blog advocating her nomination.
Dodd got the consumer agency through the Senate despite the many
public and private pronouncements that it was near death. Whether the
same thing is happening with a possible Warren nomination is a question
that few can answer.