President Barack Obama ’91 today introduced Harvard Law School Professor Elizabeth Warren as his choice to head the steering committee of the newly created Consumer Financial Protection Bureau. Warren will serve as an assistant to the president and as a special adviser to Treasury Secretary Timothy Geithner.
The president made his announcement at press conference in the White House Rose Garden, with Warren and Geithner standing by his side. He praised Warren’s dedication, calling her “one of our country’s fiercest advocates for the middle class.”
“Long before this crisis hit, she had written eloquently, passionately, forcefully, about the growing financial pressures on working families and the need to put in place stronger consumer protections,” Obama said. “And three years ago she came up with an idea for a new independent agency that would have one simple overriding mission: standing up for consumers and middle-class families.” The president said Warren will “oversee all aspects of the bureau’s creation” and will “play a pivotal role” in picking her successor. Read his prepared remarks.
In a written statement released by the White House, Warren said: “President Obama understands the importance of leveling the playing field again for families and creating protections that work not just for the wealthy or connected, but for every American. … The new law creates a chance to put a tough cop on the beat and provide real accountability and oversight of the consumer credit market. The time for hiding tricks and traps in the fine print is over. This new bureau is based on the simple idea that if the playing field is level and families can see what’s going on, they will have better tools to make better choices.”
Said Martha Minow, dean of Harvard Law School: “There is no one as well equipped to advise the President and provide clear analysis and advocacy on consumer issues in this complex economy as Elizabeth Warren. Long before the onset of the current financial crisis, Elizabeth Warren saw the gathering storm, as more and more hard-working Americans were being forced into personal bankruptcy. She told us then what we’ve all learned since — that unfair lending practices and risky financial instruments were putting our national economy at risk. While we will miss her fiercely here, it is simply terrific that this superb member of the Harvard Law School faculty — supported by so many of her current and former students, and colleagues here and across the country — will assist the President and the Treasury Secretary in setting up the new consumer finance regulatory body that was her brainchild. I know that she will bring to it the same rigorous demand for facts, clarity of communication with the public, and extraordinary energy and focus that she has given to her work with the Congressional Oversight Panel, monitoring the Troubled Asset Relief Program. With Elizabeth Warren’s help, our national economic recovery will proceed with serious commitment to reduce the risk of crisis in the future.”
Warren, who will begin her post immediately, most recently served as chairwoman of the Congressional Oversight Panel, which was created in 2008—after the onset of the current financial crisis—to oversee Congress’s use of the TARP money and to monitor bank bailouts. Warren was one of three experts nominated by House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid to serve on the five-member bi-partisan panel. In that role, she has made headlines for her criticism of the banking industry and the Treasury, and for her plain spoken support of stronger financial consumer protection laws.
Treasury is responsible for establishing the new Consumer Financial Protection Bureau, as part of this year’s Wall Street financial regulatory overhaul, and under the law must transfer authority to the Fed no later than July 21, 2011. Warren will lead the search for the first director of the new bureau. A nonprofit nonpartisan think tank focused exclusively on U.S. financial services policy, the Cambridge Winter Center, has provided an overview and analysis of the mandate and key responsibilities of the bureau (PDF).
An expert on bankruptcy, she has been a longtime critic of predatory lending practices of the mortgage and credit card industries. In a 2004 interview on PBS’s Frontline, Warren warned credit deregulation was having a catastrophic impact on low-income and middle-class Americans—and on the American economy more broadly.
Since 2007, Warren has advocated for the creation of a Consumer Financial Protection Agency. She outlined her ideas for the agency, modeled after the Consumer Product Safety Commission, in a 2007 article, “UnSafe at Any Rate,” in Democracy: A Journal of Ideas. In a later article in the Summer 2009 Harvard Law Bulletin, Warren said, just as unsafe toys and toasters are illegal, unsafe financial products should be, too, because they’re not only dangerous to the individual buyers, they can also create a massive domino effect that leads to widespread economic chaos.
“If there had been a Financial Product Safety Commission in place 10 years ago, the current financial crisis would have been averted,” she said.
Warren joined the Harvard Law School faculty in 1992 as the Robert Braucher Visiting Professor of Law and was named Leo Gottlieb Professor of Law in 1995. She was a co-founder, guest lecturer and board member for HLS’s Semester in Washington, the school’s first semester-away program for academic and clinical credit. In 1997 and 2009, she received the Sacks-Freund Teaching Award in honor of her teaching ability, openness to student concerns and contributions to student life at HLS. Watch 2009 Class Day video.
She has written more than a hundred scholarly articles and eight books, including bestsellers “The Two-Income Trap” (Basic Books, 2003) and “All Your Worth” (Simon & Schuster 2005), both co-written with her daughter Amelia Warren Tyagi. She has been principal investigator on studies funded by the National Science Foundation as well as private organizations. She was chief adviser to the National Bankruptcy Review Commission and was named to the Federal Judicial Education Committee as its first academic member. She received her J.D. from Rutgers Law–Newark and her B.S. from the University of Houston. In 2008, she was named a fellow of the American Academy of Arts & Sciences.
Recently, Warren was named as one of Time Magazine’s 100 most influential people in 2010, one of “The Decade’s Most Influential Lawyers” by The National Law Journal in the category of Legal Education, One of the 50 Most Powerful People in D.C., by GQ Magazine, and Bostonian of Year (video below) by The Boston Globe.
Last month, a number of law school faculty, current students from the classes of 2011 and 2012 and one hundred and sixty-two graduates of HLS wrote letters to President Barack Obama ’91 urging the president to nominate Warren for the top spot at the bureau.
Also in August, a group called the Main Street Brigade released a Western-themed rap video calling for Elizabeth Warren to be nominated as the first director of the Bureau of Consumer Financial Protection.