Geithner Praises Warren, Acknowledges She Is a Candidate for CFPB Director
Treasury Secretary Timothy Geithner said this week that Elizabeth Warren remains a candidate for heading the Consumer Financial Protection Bureau.
“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.
What’s unusual here is not that Geithner was forced to praise Warren; it’s that it was pretty well-established when Warren got the job that she would not really be on the short list of candidates to permanently take over the CFPB. She described it on Bill Maher’s show as a choice, between being nominated for the position and having to go underground, to taking this counselor role and standing up the agency. Some in the advocacy community said that there was nothing stopping the White House from nominating Warren afterwards, and that was true, but practically speaking, it was seen as highly unlikely.
Why, then, the return of this as a possibility? Clearly it’s the inability for the White House to get anyone else to take the job. Part of this is just reticence to having to wait months for Senate confirmation, but the other part is the wariness of jumping ahead of Warren and taking the position. For all their strategery, I think Geithner and the Administration got played on this one. Warren entered the Treasury Department and made herself impossible to replace, using the outside support of the progressive community and the inside support gained from her competency in standing up the agency, loyalty from the staff and even a thawing of relations with the entities the CFPB would regulate. She hasn’t won over every banker but she’s entered the dialogue and made her pitch simple enough that it can garner widespread support. Only in Washington could it be considered controversial.
Anybody who says Warren is “controversial” has got to be a lending industry huckster or have a member of Congress in their back pocket. Who else opposes forthright disclosures to borrowers? Who else avoids questions like “What is the price?” “Can a borrower afford it?” or “Can a borrower get a better deal somewhere else?’”
“This is like the most basic stuff,” Warren said. “You can tell what a box of cereal costs. You can tell what a jacket costs. You can even tell, kind of, what a plumber costs. But you can’t tell what some of the most powerful financial decisions in your life actually cost.”
The new agency, formed as part of the Dodd-Frank financial-overhaul law, aims to end an era of lending charlatanism that led to the bust.
“We’re trying to make the price clear, the risk clear, and make it easy to compare products,” Warren said. “If banks can’t build a business model without fooling people about the price, or hiding the risks, or obfuscating the products so nobody can make any direct comparisons, they’ve got a problem.”
It’s entirely possible that Warren won’t get the CFPB job. Maybe that’s for the best, as it frees her up to run for Senate in Massachusetts. But it’s actually an option now, a very real one. And that’s entirely due to her guile.