12/03/2012 02:02 pm ET Updated Feb 02, 2013

How Elizabeth Warren May Affect Your Personal Finances

Who is this woman causing such a tizzy in Congress?

Meet Elizabeth Warren. She's one of a record 20 women who will be in the Senate next year. But the reality is that she was making waves long before she gave her victory speech on election night.

Why? Perhaps it's because this Harvard Law professor is not only an expert on bankruptcy law, but also because she is a consumer protection advocate with an attitude, which you can see on full display in this juicy quote from her speech at this year's Democratic National Convention: "Wall Street C.E.O.s -- the same ones who wrecked our economy and destroyed millions of jobs -- still strut around Congress, no shame, demanding favors and acting like we should thank them."

But it's not just her fearlessness in taking on entrenched powers that has gotten her attention. She has other serious experience, from chairing the Congressional Oversight Panel monitoring the $700 billion TARP bailout to creating the Consumer Financial Protection Bureau (CFPB).

For her efforts, she's made a lot of enemies in Washington and a lot of fans outside of it. When she ran for the Senate on the Democratic ticket, she raised $39 million for her campaign -- more than any other Senate candidate this year, despite receiving zero support from Wall Street. Although she trounced her moderate Republican opponent, conservatives and Wall Street lobbyists are already planning their strategy to disarm her proposed regulations.

Ready or Not, Here Comes Warren!
It's clear that Warren is ready to make some big changes in Washington. So what exactly is on her mind? These six things are likely to be on her agenda -- and they're likely to affect your wallet.

1. Reform Bankruptcy Laws, Including Student Loans
Warren made her name in bankruptcy issues. She's quick to come to the defense of the average individual who declares bankruptcy -- her published research shows that half of Americans who seek bankruptcy do so because they can't afford to pay their medical bills. This includes people who have insurance, so it's not about being lazy or trying to game the system. (Although her research has been criticized by some conservatives as being shoddy.)

She lobbied unsuccessfully against the "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005," which favored the financial industry by making it nearly impossible to clear student loan debt in bankruptcy, among other things. Warren has written before about how these new bankruptcy regulations are particularly damaging to women because they give priority to credit card debt over child support payments. Needless to say, one of her priorities will likely be to dismantle this act.

RELATED: How I Went Bankrupt at 23

2. Protect the CFPB
The Consumer Financial Protection Bureau (CFPB) -- whose mission it is to ensure that consumer financial products, such as student loans and mortgages, work for Americans -- is Warren's baby. She came up with the idea and created it. But Republican leaders have been using several tactics to take the teeth out of it, like blocking her appointment to direct the agency. One bill introduced to the House of Representatives takes funding power for the CFPB away from the Federal Reserve and hands it to Congress, which means Congress could completely defund the CFPB and render it useless. Warren wrote a response on Huffington Post that was sharply critical of Wall Street, lobbyists and Congress members. The bill wasn't expected to make it through the Democrat-controlled Senate, and it definitely won't now that its protective mama bear is there to defend it.

3. Raise Taxes on the Wealthy
Warren states on her campaign website that she supports returning to Clinton-era tax rates for the wealthiest Americans. She's made it clear that she thinks wealthy Americans who have "made it" should give back via taxes.

RELATED: Why the Wealthy Feel Poor

Remember Obama's infamous "you didn't build that" speech? That was originally a Warren idea, as this quote from a speech she made on the campaign trail indicates:

There is nobody in this country who got rich on his own. Nobody.You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for; you hired workers the rest of us paid to educate; you were safe in your factory because of police forces and fire forces that the rest of us paid for... Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.

It's safe to say Warren isn't a believer in trickle-down economics.

4. Support Equal-Pay Legislation
Warren repeatedly hammered Republicans during her campaign for voting against the Paycheck Fairness Act, which would have required companies to justify pay disparities between female and male employees, as well as bar retribution against employees who discuss paychecks with one another. Given that Warren has planted her flag on the side of this act, if legislation in the same spirit came back around, she'd probably vote for it -- or risk being called a flip-flopper.

RELATED: 6 Ways the President Could Actually Close the Wage Gap

5. Reform Housing and Mortgage Policies
Warren states on her campaign website that she wants to improve the economy by addressing the housing crisis, using tools like "principal write downs [reducing the value of the mortgage so that it is worth the market value of the house, instead of the inflated price the homeowner bought it for before the financial crisis in 2008], refinancing options for homes that are underwater, cash for keys [and] short sales." That's music to the ears of the 22% of homeowners with houses that actually are underwater.

6. Protect Medicare and Social Security Benefits
Medicare and Social Security were huge issues in this year's election. Obama wanted to preserve them; Romney wanted to change the benefits and structure of both Medicare and Social Security. But Warren stated unequivocally in a Senate race debate that "I will not go to Washington to cut Medicare or Social Security benefits."

What Does the Future Hold for Warren?
She's one of 100 senators, and one of 535 members of Congress. And she's new, which means that she doesn't have seniority. How could she make a difference, beyond just casting a vote per bill?

When it comes to banking regulations, Warren's biggest chance at having a role in reform is if she's appointed to the Senate Banking Committee (officially called the Senate Committee on Banking, Housing and Urban Affairs). From that position, she can have a hand in writing the legislation, as well as make revisions to the Dodd-Frank Act. Her opponents -- including those banks she'd want to regulate, plus Republicans -- aren't keen on her getting a seat.

She's an obvious choice for the committee, given her expertise and experience with banks. We won't know until January whether she gets a seat, but it depends on how many positions are open, as well as whether other senators with more seniority gain appointment instead. Despite the opposition, it's likely that Senate Majority Leader and Democrat Harry Reid will appoint her to the committee because he's under a lot of pressure to do so.

RELATED: 10 Things You're Embarrassed to Ask About Banking

If Warren wins a seat on the banking committee, she can work within the system for change. If not, she'll probably use her other tactic: speaking out. She has a reputation for never shying away from a good debate, and she was clear during her campaign that she's not going to sit back and kowtow:

"If the notion on this is we're going to elect somebody to the United States Senate so they can be the 100th least senior person in there and be polite, and somewhere in their fourth or fifth year do some bipartisan bill that nobody cares about, don't vote for me."

One tactic she's not likely to use? The ability to filibuster, which allows a Senator to block action on a bill traditionally by holding the floor for hours in debate. She's vowed to reform Senate rules so that it's not possible for one senator to kill legislation through this increasingly common tactic. It's reform that Republicans have also vowed ... to oppose.

Tell Us...
Do you support or oppose Warren's ideas? Which one of these initiatives would you want her to pursue?

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