Warren still candidate for consumer agency: Geithner

Reuters News
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Posted: Apr 19, 2011 11:17 AM

By Mark Felsenthal

WASHINGTON (Reuters) - Controversial consumer watchdog Elizabeth Warren remains under consideration to run a new consumer financial protection agency, Treasury Secretary Timothy Geithner said on Tuesday.

"Oh, absolutely, and she is doing an excellent job of bringing clear disclosure to Americans so they can make a better choice about how to borrow to finance a home, or how to make sure they can responsibly borrow on a credit card," Geithner said when asked in an interview on Bloomberg TV on whether she remains on the president's list of candidates to run the agency.

Congress created the new bureau as part of the Dodd-Frank financial reform law put in place last summer in the wake of one of the most severe financial panics in U.S. history.

Elizabeth Warren, a law professor who headed a commission to investigate the administration's massive rescues of banks during the crisis, has been helping the Obama administration set up the Consumer Financial Protection Bureau, which is due to begin operations in July.

Warren was an obvious front-runner to lead the new agency, but ran into opposition from Republicans over the perception that she was too confrontational with the financial services industry.

Senator Christopher Dodd, one of the chief authors of financial reform legislation, questioned last year whether Warren could win enough support to overcome her Republican critics. Dodd retired from the Senate in the fall.

The Obama administration has approached other candidates about the job, including Federal Reserve Governor Sarah Raskin, who has been a former state bank regulator and Senate aide.

The bureau's job is to preventing abusive or exploitative practices in home loans, credit cards, and other typical consumer financial transactions, and was a key piece of the legislation.

"We saw a financial crisis that caused devastating damage to average Americans in part because they weren't given the basic protections governments need to provide and we're going to fix that," Geithner said.

Republicans, who gained substantial political momentum after big gains in mid-term elections in November, have made reversing elements of that legislation a top priority. They have said that uncertainty and red tape created by the measure hampers business and job creation.

Some lawmakers and lobbyists have proposed changing leadership of the bureau to a five-member commission instead of a single director, in an attempt to diffuse its power. Another proposal would fund the agency through congressional appropriations rather than through the Federal Reserve, reducing its independence.

(Reporting by Mark Felsenthal; Editing by Neil Stempleman)