WASHINGTON -- Elizabeth Warren, rebuffed by the White House, today leaves the consumer agency she conceived of and created to return to academic life at Harvard Law School.
Her unit, the Bureau of Consumer Financial Protection, is charged with protecting borrowers from abusive lenders. Created in the wake of the most punishing financial crisis since the Great Depression, which Warren has said began "one bad mortgage at a time," the agency is one of President Barack Obama's most notable accomplishments in attempting to reform the nation's financial system.
But after hostile sniping from Congressional Republicans, and some Democrats, the White House was able to duck questions about its commitment to Warren and her desire to lead the agency, and instead nominated one of her deputies, former Ohio Attorney General Richard Cordray, to be the unit's inaugural chief.
Experts largely agreed Warren was the best candidate for the job. Community bankers, though initially fearful of increased oversight, grew to accept her. Unions and community groups enthusiastically supported Warren, and repeatedly urged the White House to nominate the noted consumer advocate.
In the coming days, Warren will leave Washington, take a vacation with her family to the Legoland theme park in California, and return to Cambridge, Mass., where she'll decide whether to challenge Republican Senator Scott Brown in the 2012 election.
Warren sent a farewell note to the nearly 500 staffers she hired and inherited from other federal agencies.
"I leave this agency, but not this fight," Warren wrote. "The issues we deal with -- a middle class that has been squeezed and business models built on tricks and traps -- are deeply personal to me, and they always will be."
READ Warren's full note:
From: Warren, Elizabeth
Sent: Friday, July 29, 2011 1:18 PM
Subject: A new chapter
Four years ago, I submitted an article to Democracy Journal that argued for a new government agency called the Financial Product Safety Commission. I threw myself into that piece because I felt strongly that a new consumer agency would make the credit markets work better for American families and strengthen the economic security of the middle class.
In 2007 and 2008, I wrote about the new consumer agency in a number of places, and I talked about the idea with anyone who would listen.
And then in 2009, something amazing happened. In June of that year, the President invited a few hundred people to the White House as he unveiled his initial outline for financial reform. It was the first time I had ever been invited to something like this. Just before the President stepped out, aides passed around a summary of the proposed reforms. I grabbed a copy and started tearing through it. As I skimmed over derivatives and capital reserve requirements, I turned a page and saw it—a proposal for a consumer agency. Until that moment, I wasn’t certain whether the new agency would be part of the reform package or not.
Under the leadership of Secretary Geithner, Michael Barr, Eric Stein, our own Peggy Twohig, and so many of our other colleagues, the Treasury Department began to refine and improve the initial idea, preparing a proposal to submit to Congress. With strong support from the President, early leadership from Barney Frank and Chris Dodd, and grassroots efforts launched by many consumer groups, the agency began to gather momentum. Despite repeated declarations from the financial services industry and some in Congress that the agency was “dead on arrival” or “going nowhere,” the proposal moved through two nail-biting committee votes, four nail-biting floor votes, and one nail-biting conference committee. It was a hard fight, but the result was a strong and independent new Consumer Financial Protection Bureau with the tools needed to make a real difference for American families.
And then something even more amazing started to happen. Good people started turning the idea into a reality. With Wally Adeyemo as Chief of Staff to keep it all organized, we were underway. Smart people with a wide variety of backgrounds—banking, consumer advocacy, government, business, teaching—focused their energy and enthusiasm and creativity on building something new—something that would work for American consumers.
All along the way, the pieces came into place. We set critical priorities for the new agency, including streamlining mortgage disclosure and making credit cards easier to understand. We focused our efforts on the challenges facing military families. We organized the most aggressive and effective outreach effort anywhere in government to make sure that our goals were clear and we got as much input as possible from those who will be most affected by the agency's work. We designed a high-speed, effective HR system, and we figured out how to get in place necessary procurements to support our work. We developed legal concepts to guide our work and procedures to make sure we always honored the law. We created an innovative supervision program. We generated rules of the road to guide our enforcement and fair lending programs. We designed the systems necessary to meet our statutory deadlines and to complete ongoing rule-writing passed from other agencies. We organized an approach for connecting with consumers all across the country through our website, consumer response system, and more. And we did it all in full view, working with Congress and the media every step along the way to make sure the American people are engaged in our work and able to hold us accountable to our mission.
That is only a small summary of what we have accomplished together. We did it—and we did it well. And we have some independent verification of that: Two weeks ago, our inspectors general -- a tough and independent pair of judges -- wrote a glowing report about our stand-up period.
Whether you have been here for long months or only a few days, I want to thank you for choosing to be part of this agency. I know that every one of you had other options. I also know that we chose you because we believe you have something special to add. I am grateful that you came here to make a difference.
Today is my last day at the Bureau. I leave this agency, but not this fight. The issues we deal with—a middle class that has been squeezed and business models built on tricks and traps—are deeply personal to me, and they always will be.
I will cheer as you open a new chapter in our ongoing push for a strong and independent CFPB. You can realize the vision of a 21st century government that holds law-breakers accountable and that enforces basic rules that make markets work honestly. An honest market will give companies that provide fair value to their customers a chance to flourish, free from competition with cheaters. And an honest market will give American families better information, better prices, and better products—and a chance to achieve real economic security. Now it’s up to you -– and I couldn’t be more hopeful about what lies ahead.
Shahien Nasiripour is a senior business reporter for The Huffington Post. You can send him an email; bookmark his page; subscribe to his RSS feed; follow him on Twitter; friend him on Facebook; become a fan; and/or get e-mail alerts when he reports the latest news. He can be reached at 1-917-267-2335.