The Obama administration will, for now, avoid a nomination fight over Elizabeth Warren by appointing her the interim head of the Consumer Financial Protection Bureau. She will have the title of special assistant to the president and will report jointly to Obama and to the Treasury Secretary, Tim Geithner. This decision will prevent Warren from entering the ‘cone of silence’ and allow her to be an open and vocal advocate for the bureau.
The decision does not preclude the possibility that Ms. Warren could eventually be named director, and at the least, she would play a pivotal role in deciding whom to appoint to the job, according to the official, who spoke on the condition of anonymity so as not to pre-empt the formal announcement.
What is this bureau going to do?
The bureau will have the authority to write and enforce new standards for mortgages, credit cards, payday loans and a wide array of other financial products, and the White House said it believed it was imperative that Ms. Warren promptly begin to shape that process.
Predictably, there are those on the left who want to spin this as some kind of sleight of hand move to marginalize Warren. Any such analysis is completely premature and it just reeks of petulance. The law allows the Treasury Department to set the bureau up, and they have deputized Warren to do that job. She won’t just report to Geithner, but also directly to the president, which gives her needed clout. And, while it is not clear that she will eventually be named the director, she will clearly have the best argument for being named director since she will have been serving as acting director for many months prior to any nomination.
The administration should be taken at their word on this. They see little upside to getting bogged down in a contentious nomination fight that would require Warren to go silent while the agency is being created. They want her to be able to talk up the bureau and to testify before Congress, which she wouldn’t be able to do if her nomination was pending.
And, even if she isn’t ultimately named the director, she will have the most influence over the the initial shape and direction of the bureau, which is probably the most important thing.