[u]BLOG VIEW:[/u][/i] It's hard to believe that the enactment of the nation's most sweeping financial reform legislation in decades could take a backseat to, well, anything else, at least from the perspective of a professional in the financial services industry.[/b] Yet, that's exactly what happened this week. President Obama's signing of the Dodd-Frank Act Wednesday was simultaneously trumpeted as a victory by consumer advocates and characterized as a massive and shortsighted legislative mess by much of the private sector. But his signature was also viewed as nothing more than a formality, and the real story of interest to lenders relates to the soon-to-be created Consumer Financial Protection Bureau (CFPB). It's obvious why the CFPB is top of mind for the lending industry: Its rulemaking authority is unprecedented. The bureau will oversee all of the familiar laws governing mortgage lending – an impressive alphabet soup that includes TILA, HOEPA, RESPA, FACTA, SAFE and FCRA, among others – as well as assume the regulatory functions of essentially all the federal financial agencies. The big question, of course, is who will lead the CFPB. The White House last week gave its short list of candidates: Gene Kimmelman, a Justice Department official; Michael Barr, the Treasury's assistant secretary for financial stability; and Elizabeth Warren, chairwoman of the Congressional Oversight Panel (COP). Warren's name has stirred particularly strong emotions on both the left and right. Nary an article about the former Harvard law professor has failed to portray her as anything short of a poster child for the liberal agenda. She has labor-union support and is often credited for conceptualizing the CFPB. On the other side of the coin, Republicans are said to be wary of Warren. Sen. Bob Corker, R-Tenn., this week, while sidestepping discussion of Warren's candidacy specifically, said Obama should avoid ‘naming an activist to this position,’ on the grounds that doing so would be a dangerous, worst-case scenario. In an interview with NPR Monday, Senate Banking Committee head Chris Dodd, D-Conn., said Warren would be a ‘terrific nominee,’ but questioned if she would be ‘confirmable.’ To date, the biggest twist to the Warren-as-CFPB-chair affair hasn't arisen from the Senate, however. It's come from within the administration – namely, the Treasury. Huffington Post, citing an unnamed source familiar with Treasury Secretary Tim Geithner's feelings on the matter, recently ran an article suggesting Geithner is not high on Warren as a nominee. A Treasury spokesperson quickly dispelled those claims, calling Warren ‘exceptionally well-qualified’ for the job. That Warren and Geithner have something of an adversarial relationship shouldn't come as a surprise. As head of the COP – the busiest and most prolific of the three federal bailout watchdogs – Warren has repeatedly reminded Geithner of the Treasury's failed handling of the Home Affordable Modification Program (HAMP). She has consistently pressed Geithner for benchmarks and metrics, redefault rates and transparency. And consistently, Geithner has been left mouth agape, unable to provide concrete answers. In theory, small-government folks should find her tack appealing. Warren's complaints about HAMP are largely in line, for example, with those from Senate Finance Committee Ranking Member Charles Grassley, R-Iowa. In a prepared statement yesterday, Grassley noted that the Treasury ‘still has not established performance goals or benchmarks for HAMP, meaning that there is no effective way for us to know whether this 50 billion dollar program is accomplishing its intended purpose.’ What irks the private-sector mortgage industry, however, is Warren's insistence that HAMP is ‘too small, too slow.’ While her demands for government accountability may play well with some Senate conservatives, her push for greater government involvement in the mortgage markets does not. Warren has argued that any federal foreclosure prevention program should make servicer participation mandatory, and she appears to favor the use of principal reductions in loan modifications. Regardless of whether Warren is ultimately named to lead the CFPB, it's clear she'll be an impact player in the bureau's creation. ‘[O]ne thing I know for certain, is however we move forward, she's going to be a strong voice in helping shape this and make it the most effective voice for consumers that it possibly can be,’ White House senior adviser David Axelrod told reporters las
