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Cordray--not Warren--gets presidential nod at new consumer bureau

Warren tells Congress illegal activities in mortgage scandal may not have been fully investigated


The Consumer Financial Protection Bureau, brainchild of Elizabeth Warren, opens for business this week--but without Warren at the helm.

GOP vow to block 'any nominee' apparently still in effect

On Monday, "President Barack Obama on Monday announced he wants former Ohio Attorney General Richard Cordray as the new agency’s director," says a July 18 piece at Politico.com. "His decision bypasses consumer advocate Elizabeth Warren, the bureau’s architect, and sets up a bruising confirmation showdown with Senate Republicans, who vow to block any nominee from confirmation.

"When Obama authorized Warren to get the bureau up and running a year ago, 'I asked Elizabeth to find the best possible choice to lead the bureau,' [Obama] said in a brief Rose Garden statement, flanked by Warren, Cordray and Treasury Secretary Timothy Geithner. 'And that’s what we’ve found in Richard Cordray.' ”

Nomination disappoints fans, sparks Senate campaign rumors

Choosing anyone but Warren was bound to disappoint her fans and supporters; because of her research on consumer bankruptcy, advocacy for transparency with financial products and warnings about predatory lending's pushing the economy to the brink of meltdown, Warren has amassed  a legion of exuberant followers. Indeed, on the heels of the the Cordray announcement, rumors began circulating that Warren is now free to make a run at Scott Brown's Massachusetts' Senate seat. Of course, GOP opposition to Warren--often blatantly spiteful--would not prevent Cordray from hiring Warren for virtually any open position in the new bureau.

Warren foes: congressional Republicans, financial services industry

Referencing the GOP opposition, a July 18 NPR article says, ". . .Warren has repeatedly brought out the worst in congressional Republicans who have show[n] varying levels of hostility to her whenever she has appeared on Capitol Hill to testify about the new agency, her brainchild which was created by the Dodd-Frank financial reform law.

"The financial services industry has also been a Warren foe, fearing that she was less sensitive to its profit goals and engineering innovations than it would prefer in the head of the new agency.

"Nominating Warren would have likely led to another stalemate with congressional Republicans who could have held up her nomination indefinitely. It also would have handed the Senate GOP a ready made issue they could use in seeking campaign money from bankers in an election cycle that already poses huge challenges for Democrats trying to maintain Senate control."

GOP responds to possibility of recess appointment

For months speculation was widespread that Obama might circumvent a protracted, perhaps pointless Senate confirmation battle by simply making what is known as a recess appointment; but because of procedural rules, the likelihood of Warren's remaining beyond the end of the year rendered that strategy just about counter-productive. Furthermore, Republican angst over such a possibility mushroomed to such proportions that even other positions have been threatened to be de-funded if recess appointments were made.

'The economics of working families'

In a July 15 NY Times "Dealbook" video, Warren explains her background and her focus on helping the U.S. consumer; at the 2:48 mark she says, "I've spent my entire adult professional life studying the economics of working families. And I watch year after year after year as they just get hammered, hammered harder and harder. We now live in an America where millions, tens of millions, of families live one bad diagnosis, one pink slip, one terrible interest-rate reset away from complete financial collapse."

Why that stance seems to so agitate Republican leaders is tough to fathom, but agitate it does, to such a degree that during a May hearing Rep. Patrick T. McHenry (R-N.C.) accused her of lying, not only about such relatively trivial matters as meeting arrangements agreed upon by his staff and Warren but also about such crucial matters as acting beyond her duties in "negotiating" in the ongoing settlement talks between scandalized mortgage lenders and the states' Attorneys General.

Role in mortgage scandal 'most irked Republicans'

According to a March Dealbook piece, the mortgage flap, at the time, was what lodged most forcibly in the collective GOP craw--apparently even after she explained the agency's involvement several times: "But it was the bureau’s involvement in recent mortgage servicing negotiations that most irked Republicans. State attorneys general and the bureau have pushed for $20 billion in fines for banks and other mortgage servicers that foreclosed on homes without the proper legal documentation.

"Committee members questioned Ms. Warren on Wednesday about her involvement in the negotiations. They complained that the bureau, which does not formally open until July 21, was overstepping its authority.

"Ms. Warren said that the bureau had entered the fray at the request of Treasury Secretary Timothy F. Geithner. 'When asked for advice, we have given our advice,' she said. 'We are not negotiating with anyone.' ”

'A partisan food fight'

Last week, yet another grilling of Warren devolved into what one participant labeled "a partisan food fight." According to a July 18 account in The National Law Journal, Warren once again kept her cool under a barrage of wide-ranging questions that varied from laughable to off-the-mark accusations that revealed either an astounding lack of research on the part of her detractors or simply plumb-mean efforts to poison the well or deceive the public. For instance, consider these examples from the story, first from--once again--Rep. McHenry [Note: emphasis added]:
Patrick McHenry (R-N.C.) asked Warren whether there were any financial products she thought should be eliminated. "I believe in markets," not bans, she replied. When McHenry pressed her, Warren again said no — but asked if he had any suggestions, drawing laughter. McHenry shot back, "I don't have a half-billion dollar budget and 400 people working for me. I thought you'd have some idea."

Committee Chairman Darrell Issa (R-Calif.) held up a page of paper with all the text blackened out, the response to a Freedom of Information Act request by Judicial Watch for CFPB documents. The redacted response, he said, "was an abuse of disclosure...and speaks loudly...of whether the transparency you speak of is occurring."

Warren was nonplussed. "I'm not sure what the request was for," she said—not surprising, since it was actually directed to Treasury Secretary Timothy Geithner and the information was redacted at the request of the Justice Department.

Jason Chaffetz (R–Utah) complained about the CFPB's budget, which contains only 10 line items. "Where is the detail of what you're doing to do?...You seem to be hiding the details," he said, complaining specifically about vague spending on "contractual services." Warren pointed out that all the CFPB's contracts can be found on the Web site USAspending.gov.

'Breaking ranks' over possible illegal actions

Aside from the sparring, Warren returned to her concern about the negotiations with the mortgage leaders, remarks described July 15 by mainjustice.com as marking "the first time a top administration official has broken ranks over the issue."
Elizabeth Warren, a senior advisor to President Barack Obama and Treasury Secretary Timothy Geithner, and who currently heads the Bureau of Consumer Financial Protection, told the House Oversight and Government Reform Committee that the government may not have sufficiently investigated claims that mortgage companies illegally seized borrowers homes.

"I think there's a real question about whether there's been adequate investigation," Warren said.

That's a concern all U.S. consumers should take to heart. It's one thing to get a decent settlement from the lenders, but if their actions included illegal activities, any settlement that results should not preclude bringing any and all appropriate criminal charges.

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