Warren gains bully pulpit for bank regulation
Elizabeth Warren, the Harvard University law professor and self-styled "cop on the beat" who protects consumers from Wall Street, left Washington last year after failing to gain enough Senate support to be confirmed as director of the new consumer financial protection agency she championed.
Now, as if in a sequel, Warren will return to the U.S. capital having been remade into a senator herself just as Congress prepares its first revisions to the landmark Dodd-Frank Act enacted in response to the 2008 financial crisis.
As a senator, Warren will gain a bully pulpit and a vote, both powerful tools in the debate over whether and how to re- regulate banks and bankers. And it comes with a secret weapon as well: the unofficial prerogative of a senator to single-handedly place "holds" on legislation or nominations.
The question in Washington is whether Warren will come back as the partisan warrior she was when she left, or whether she will adopt the milder manner needed for deal-making and legislating.
"The issue is whether her strong views will be tempered by the need to get things done," said Ernest Patrikis, a partner at White & Case LLP and a former Federal Reserve Bank of New York lawyer. "It is one thing to criticize; it is another to become an effective legislator."
Warren vanquished incumbent Republican Scott Brown by a margin of 54 percent to 46 percent this week to become the first woman senator from Massachusetts and heir to the seat held for 47 years by Democratic icon Edward Kennedy.
Warren, 63, ran for Senate after President Barack Obama decided not to nominate her as director of the Consumer Financial Protection Bureau, a Dodd-Frank centerpiece designed to help protect ordinary Americans from shoddy financial products. Warren championed the idea as a lawyer and worked as an Obama administration adviser after the law's passage to build the agency from scratch.
The banking and financial services industry fiercely opposed establishment of the bureau and Senate Republicans banded together to block her nomination as director.
Along the way, Warren became a favorite of the Democratic party's liberal wing, and she won a prime-time speaking role at the party's national convention. She used the opportunity to highlight her anti-Wall Street credentials and warn that the industry was far from abashed about the damage from the financial crisis.
"Wall Street CEOs 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," Warren said at the convention. "Anyone here have a problem with that? Well I do."
In interviews after her victory, Warren sounded a more moderate tone, pledging to reach across ideological divides.
"I come there for the same reasons I went before, and that is to work for people who need someone to speak out for them," Warren said yesterday in an interview on MSNBC's "Morning Joe." "I'll work with anyone and I really do mean that Democrat, Republican, independent, Libertarian, contrarian, vegetarian."
Warren is expected to seek a seat on the Senate Banking Committee, which would give her a direct role in writing legislation affecting the financial services industry including revisions to Dodd-Frank.