Warren is named bureau adviser
Avoiding a confirmation fight, Obama picked her as an aide to oversee creation of the new finance agency.
WASHINGTON - In a poke in the eye to the financial community, President Obama on Friday named Elizabeth Warren, an aggressive consumer advocate and Wall Street adversary, to oversee creation of an agency to regulate banks, lenders, and credit-card companies.
Sidestepping a Senate confirmation fight - for now - Obama stopped short of nominating Warren to actually head the new Bureau of Consumer Financial Protection as its director. Instead, he appointed her as a special assistant to the president, which will let the Harvard Law School professor and expert on bankruptcy move quickly to shape the bureau. As an assistant, she does not need conformation.
Senate Republicans view her as too critical of Wall Street and big banks. The business and banking community opposed Warren as director of the bureau, contending she would make the agency too aggressive. Obama praised her highly.
"Never again will folks be confused or misled by pages of barely understandable fine print that you find in agreements for credit cards or mortgages or student loans," Obama said, standing alongside Warren and Treasury Secretary Timothy Geithner in the White House Rose Garden.
"Elizabeth understands what I strongly believe - that a strong, growing economy begins with a strong and thriving middle class," the president said. "And that means every American has to get a fair shake in their financial dealings."
Billed as a big help to abused consumers, the new bureau is charged with writing and enforcing rules covering both the largest banks to the smallest storefront payday lender. Lenders will face new restrictions on the type of mortgages they write and will not be rewarded for steering borrowers to higher-cost loans. The bureau also is to protect borrowers from hidden fees and abusive terms.
These practices encouraged consumers to take out mortgages and other loans they could not afford. A rising number of defaults on such loans triggered the financial crisis that began late in 2007 and exploded the next year.
As an assistant to Obama, Warren will have an influential province from which to direct the bureau, a central element of the sweeping financial overhaul Obama signed into law in July. The consumer bureau was one of Obama's key demands, easy for the public to grasp in an otherwise dense rewrite of complex financial rules.
Liberal groups and many consumer advocates want Warren to be named director of the bureau. With the advisory appointment in place, White House spokesman Robert Gibbs said she would be instrumental in selecting a full-time director but hedged when asked if she would be a candidate.
An Oklahoma native who was a state high school debate champion, Warren, 61, was the architect of the consumer bureau, calling three years ago for the creation of an agency that would consolidate the consumer-protection powers now spread across numerous financial regulatory agencies.
