BLOG VIEW: Does the U.S. really need a Consumer Financial Protection Bureau? Probably not, but the Dodd-Frank Act gave us this new bureaucracy, and we seem to be stuck with it for the foreseeable future. But now that the bureau is in place, why hasn't the Obama administration stepped in and named a director for this new bureau?
The answer is somewhat complicated. It is widely assumed that the most obvious choice for this new position is Elizabeth Warren, chairwoman of the Congressional Oversight Panel and the individual who is widely credited with coming up with the idea for this new government entity. Unfortunately, the deepening state of political rancor in Washington, D.C., is making a Warren nomination seem more problematic than it needs to be. And complicating matters is, ironically, one of the authors of the Dodd-Frank Act.
In an Aug. 17 interview with the Hartford Courant editorial board, Sen. Chris Dodd, chairman of the Senate Banking Committee, gave the impression that he was standing behind Warren – very, very far behind her.
‘If the president wants to name her and it goes through the hearing process, then fine, she'll have my support,’ Dodd said. ‘But she has to tell me more than just [that] she's a good consumer advocate or that's she's got a great campaign. It isn't just a question of being a consumer advocate. I want to see that she can manage something, too.’
The question of whether Warren possesses management skills is utterly asinine, even by Dodd's notoriously low reasoning standards. The real question is whether Warren's nomination can get out of the Senate – the Democrats lack the votes to block a Republican filibuster of her possible nomination, and Dodd appears to think that Warren's potential nomination will be stuck behind a solid wall of Republican obstruction.
Earlier in the month, the Wall Street Journal reported that Dodd attempted to calm the partisan waters by asking Sheila Bair, chairwoman of the Federal Deposit Insurance Corp. – and a Republican – to consider taking charge of the new bureau. When weighing the option of trading in a well-defined and highly powerful position for a still-hazy and possibly weak new position, Bair declined Dodd's invitation.
There is also the possibility that the financial services industry will aggressively lobby against Warren's nomination. Dodd, a one-time Friend of Angelo, might still be carrying a torch for his former private-sector pals – and since the retiring senator is not facing re-election this fall, perhaps he is trying to curry a post-Senate job in the financial services world by making Warren seem like the candidate that could not pass muster.
Oddly enough, the day before Dodd made his comments to the Hartford Courant, his Dodd-Frank Act co-author, Rep. Barney Frank, D-Mass., sent a letter to President Obama urging ‘no further delay’ in nominating Warren for the position. Frank also requested a meeting with Obama to discuss Warren and the new bureau.
For its part, the White House has tried to avoid the debate over a Warren nomination. No date has been set for when the nomination will be announced, and the White House clouded the matter further by publicly floating two other names for possible consideration: Michael S. Barr, assistant secretary for the Department of the Treasury, and Eugene Kimmelman, a deputy assistant attorney general in the anti-trust division of the Department of Justice. While neither of these men generated any level of controversy on Capitol Hill, they have also not generated any level of deep support.
Should the White House be worried that a minor war will break out on Capitol Hill over a Warren nomination? In all seriousness, no. Any nominee that is put forward for this new position is going to be viewed with skepticism by the Republicans. After all, the Republicans' view of the Obama administration's proposals seem to have been inspired by an old Groucho Marx song: ‘Whatever It Is, I'm Against It!’
In the end, it is ultimately a lose-lose situation for everyone: The administration will look like it is chickening out of a fight if it does not nominate Warren, the Senate will go into partisan squabbling if her nomination goes forward and the financial services industry will get stuck in the middle and stuck with the tab, no matter what the outcome.
– Phil Hall, editor, Secondary Marketing Executive
(Please address all comments regarding this opinion column to hallp@sme-online.com.)
