I can speculate about why Obama didn’t pick Elizabeth Warren to run the Consumer Financial Protection Bureau, but I’m not sure she knows either. Here’s the long view: Obama could have dumped the CFPB in the legislative process that led to the Dodd-Frank financial reform bill. In fact, he was pressured by some Democrats — specifically, one whose name ended up on the title of the law — to dump it. He didn’t. Warren’s idea became reality. Now, she’s vouching for him with liberals trying to figure out what to think of his decision to pick someone else to run the agency. Here’s Warren writing in, appropriately, the HuffPost:
This week is the culmination of two years of hard battles. The President put the consumer agency in his first outline of financial regulatory reform, and he never wavered in his support for it. The agency was declared dead several times, and weak versions and lousy bargains were offered again and again, but he stood fast. When he signed Dodd-Frank into law, creating the new agency, he offered me the chance to stand it up — something for which I will always be grateful. The fights continued, and again, the President never wavered in his support. In fact, just last week he issued a veto threat if the Republicans try to move the agency’s funding to the political process, and I know that in the future he won’t allow opponents of reform to succeed in weakening the CFPB.
The CFPB is not the be all end of financial regulation. But it makes for powerful politics, not least because it can be explained in plain English. Tell someone derivatives transactions will have to be cleared through exchanges and you might as well be speaking Algonquian. Tell them you’re trying to stop lenders from deceiving families in the fine print of bread-and-butter financial products like mortgages and credit cards, and they’ll warm up. If Obama wants to use Dodd-Frank, one of just two or three landmark legislative victories in his first term, for re-election message, he needs credibility on the consumer bureau. Director or not, Warren remains a uniquely qualified person to give it to him.