The first big battle of the new financial era centres on an outspoken grandmother who, according to her husband, can make grown men cry.
Elizabeth Warren, an Oklahoma native and Harvard law professor, is the leading candidate to head a new consumer protection agency in the U.S., a concept which she proposed and championed.
Now that idea is on the cusp of becoming reality, one of several historic changes contained in the overhaul of the financial system that President Barack Obama signed into law last week.
To her many admirers, which include liberal Democrats, labour unions, and consumer groups, Ms. Warren is the only person who will make sure the agency functions like a tough new cop on the financial beat.
But it’s no exaggeration to say that banks loathe the idea of Ms. Warren at the helm of a powerful regulator which will have sway over some of their bread-and-butter businesses, including credit cards, mortgages and personal loans.
The financial industry “fairly violently dislikes Elizabeth Warren,” said Douglas Elliott, a fellow at the Brookings Institution in Washington and a former investment banker.
The head of the new consumer financial protection bureau will have an unusual opportunity to mould its mission, he added. Banks fear that under Ms. Warren, the agency would be “excessively interventionist.”
Ms. Warren, 61, does not mince words when it comes to the failings of the banking industry. Since 2008, she has headed a congressional oversight panel charged with examining $700-billion (U.S.) in bailout funds. In the process, she has tangled with the Treasury Department and banks, and their lobbyists.
A leading expert on bankruptcy, Ms. Warren has long argued that American consumers deserve a separate regulator to protect them in today’s financial marketplace. While Americans can reasonably expect that the new toaster they just bought will not explode, she has written, they have no such assurance that routine financial products, like mortgages and credit cards, are equally safe.
