WASHINGTON -- On Thursday, House Republicans cemented plans to slash the budget for the new Consumer Financial Protection Bureau, setting up a major fight with the Senate and President Barack Obama over one of the signature progressive accomplishments from last year's financial reform bill.
But for public interest groups, there was a sliver of good news buried underneath: Elizabeth Warren, the consumer watchdog charged with setting up the CFPB, named longstanding consumer advocate Raj Date the head of rule-writing and research for the nascent bureau.
"Raj's background gives him a great set of skills and experiences," Warren told HuffPost. "He has a creative vision for organizational design, he's got industry experience in the credit markets and he was one of the strongest voices for reform in the aftermath of the financial crisis."
Date has been a top adviser to Warren since last year, and was one of the first four people to join the new agency. His background is in banking -- with a resume that includes leadership positions at Deutsche Bank, Capital One and uber-consulting firm McKinsey & Co. during the past decade. But following the financial collapse of 2008, Date struck off on his own, founding (and partially funding) the Cambridge Winter Center for Financial Institutions Policy, a reform-minded think tank.
And while Date remains highly respected by bankers, he was one of the key players arguing for a major overhaul of the financial system during the congressional debate. Date's nuts-and-bolts economic research formed the backbone for many of the arguments launched by Americans for Financial Reform -- an umbrella group for consumer advocates urging stronger regulation.
"Raj is one of the few bankers who understood that the financial industry couldn't succeed by bleeding the middle and working classes dry," says Heather McGhee, director of the Washington, D.C. office of Demos, a think tank and AFR member organization.
Date was particularly effective in the debates over the Volcker Rule, which bans risky proprietary trading by banks that enjoy federal guarantees, and several consumer protection rules, especially those surrounding abusive auto lending. In his new job -- one of a handful at the agency that will report directly to Warren-- he'll be responsible for overseeing market research and writing rules. His plan is straightforward-- collect your own data, keep a constant eye on market trends to make sure you know what's going on. When you see abuses, do something about it. It's a simple plan, but one that hasn't been implemented at U.S. bank regulators before. Most agencies rely on information reported by banks themselves, rather than finding their own data. And nobody watches market trends.
"We're going to assign someone to monitor each one of these markets," Date told HuffPost, listing five categories of consumer credit: mortgages, credit cards, deposits, credit reporting agencies, and another category including student loans and car loans. "That's new. If you go over to any other agency right now, there's nobody assigned to just watch what's happening in, say, the mortgage market."
The new agency has plenty of hurdles ahead. House Republicans are not only going after the budget for the CFPB, they're also targeting Warren herself. A vote is expected Friday on an amendment from Rep. John Carter (R-Texas) that would effectively require President Barack Obama to fire Warren, along with 23 other top administration officials. As the budget proposal currently stands, the CFPB would have only about half of the funding it needs to get off the ground this year, an attempt by the House GOP to prevent the agency from effectively enforcing rules against Wall Street.
But if the new agency can survive the budget salvo, consumer advocates see reason for hope, even in the face of Wall Street's infamous and deep-pocketed lobbying machine. Hires like Date -- who joins a handful of very effective state regulators that Warren has also scooped up, including former Ohio Attorney General Richard Cordray and Massachusetts Banking Commissioner Steve Antonakes -- show a team of officials dedicated to actually regulating industry abuses, a rare phenomenon in Washington.
"This business is complicated, but it's not magic," Date said. "If you deify finance as somehow beyond the comprehension of government, regulators will not do their jobs and the markets will never work. You have to be willing to act like law enforcement when you have to."