US President Barack Obama named Wall Street critic Elizabeth Warren on Friday to oversee the creation of a new consumer financial protection agency, drawing praise from liberals and an outcry from Republicans and the financial industry.
Obama announced the appointment of Warren as a special adviser to steer the new agency’s establishment, allowing him to avoid a bitter Senate confirmation fight if he had nominated her to serve as its director. Republicans accused him of circumventing congressional oversight.
Calling Warren “one of the country’s fiercest advocates for the middle class,” Obama made clear the outspoken Harvard University professor would take the lead in shaping the powerful new watchdog, a centerpiece of the sweeping regulatory overhaul he signed into law in July.
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“From now on, consumers will ... have a tough, independent watchdog whose job it is to stand up for their financial interests, for their families’ future,” Obama said in the White House Rose Garden with Warren at his side, as he highlighted her working-class roots as a janitor’s daughter.
The White House hopes Warren’s appointment will appeal to voters resentful of Wall Street excesses and help energize the president’s liberal base before Nov. 2 elections, when his Democratic Party faces the threat of big losses in both chambers of Congress.
Obama used Friday’s announcement to highlight his financial reform legislation, which Republicans and Wall Street have largely opposed and voters have mostly ignored as they fret over an economy saddled with near double-digit unemployment.
The Consumer Financial Protection Bureau, which is Warren’s brainchild, will have broad powers to write and enforce rules covering mortgages, credit cards and other consumer financial products.
She has until July next year to get the agency up and running.
Warren, 61, becomes an assistant to the president and special adviser to Treasury Secretary Timothy Geithner. Obama said she would have direct access to him.
“She will also play a pivotal role in helping me determine who the best choice is for director of the bureau,” Obama said.
The White House said Obama hopes to name the agency’s chief in the next several months but declined to say whether Warren would be a candidate.
Warren, whose grandmother drove a wagon in the Oklahoma land rush, said in a White House blog post that the new agency would act as a “tough cop on the beat” and declared that the time for financial “tricks and traps” was over. She did not make remarks at the Rose Garden ceremony.
Warren told US television networks the post of agency director had been on the table but she had been anxious to get to work right away, which her new role allowed her to do.
“I’m coming to Washington to try to help get this agency started ... And if I can be helpful, I don’t care if you call me the dogcatcher,” she said to Fox television.
Supporters have hailed her appointment.
“I would like to congratulate American consumers, because nothing could be better news for them in terms of being protected in financial matters like home mortgages, bank accounts, and credit cards,” said Barney Frank, Democratic chairman of the House Financial Services Committee.
Warren’s critics saw her appointment differently.
“The Obama administration’s first priority should be ensuring that our financial institutions are operated in a safe and sound manner,” Republican Representative Spencer Bachus said. “Instead they resort to a calculated political ploy to appoint a passionate, but inexperienced, advocate to run a new agency with unprecedented power.”
Matt McCormick, a portfolio manager and banking analyst with Bahl & Gaynor, said Warren’s appointment was done more for political reasons than for correcting financial industry ills.
“I really doubt she will have the ability to bring people together considering the political nature of her appointment,” he said. “It is troubling.”
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