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Just four days before the Consumer Financial Protection Bureau is set to launch, President Obama will finally name a director. Obama has chosen former Ohio Attorney General Richard Cordray to lead the entity which Elizabeth Warren envisioned and muscled through Congress in the wake of the financial disaster as part of the Dodd-Frank Act. Cordray was hired by Warren to be the Chief of Enforcement, but on Monday Obama will put him in charge, sending Warren home.
Obama’s decision to bypass Warren, the Harvard Professor who has spent her career showing how the "tricks and traps" in the fine print of financial products have harmed the poor and "middle class families," is sure to anger consumers and their watchdog advocates who have supported her leadership role.
Warren has worked night and day to set up the Bureau by meeting with stakeholders across the country and hiring some of the best talent in consumer protection to get the Bureau off the ground. Obama, who chose not to nominate Warren last fall but instead to make her an Assistant to the President and a "Special Advisor" to the Treasury Secretary, has let her twist in the wind as the banking industry has waged a relentless assault on the Bureau, which Obama initially supported as an independent agency.
Since the mid-term election changed the political leadership of the House of Representatives, Wall Street has demanded that Congress revisit Dodd-Frank and has sought a revision of the funding and composition of the Bureau. On May 2, 2011, 44 Republican Senators signed a letter stating they will refuse to confirm anyone nominated to the position unless the Bureau is restructured. They seek to have the regulator’s funding attached to the political appropriations process instead of being tithed to the Federal Reserve’s budget as it currently is, and to install a five-member commission instead of a single regulator. These moves are patently designed to defund, delay, and destroy potential regulatory initiatives by a Bureau that was created by legislation passed only a year ago.
Warren has been hauled up to the Hill to testify in front of House oversight committees even though the Bureau has not even had a chance to become operational; those hearings have turned Warren into a punching bag for partisan dissent. Her shabby treatment as a House witness has led numerous members of Congress to publicly apologize to her for the behavior by other members of Congress. On June 2, 2011, 89 members of the House wrote a letter urging the President to nominate Elizabeth Warren.
Obama has dithered. His Wall Street supporters don’t like Warren and his political fundraising is underway with a bang. Elizabeth Warren is an aggressive, savvy and earnest advocate on behalf of consumers everywhere and she deserved to be nominated to this position for which she has worked tirelessly. Cordray, her lieutenant, is sure to carry on the work, but Obama has shamefully robbed Warren of the opportunity to run the entity she championed to make a difference for the American people.
Theresa Amato, a public interest lawyer, is the executive director of Citizen Works and the director of its Fair Contracts Project at www.faircontracts.org.