Wall Street and big banks ambush appointment of Elizabeth Warren to head new consumer financial protection bureau

Consumer news doesn’t often make headlines, but the selection of Richard Cordray, a former Ohio attorney general, instead of Elizabeth Warren to head the new Consumer Financial Protection Bureau is big news.

Public Citizen, a consumer advocacy group, says Warren was the obvious best choice, but Wall Street and the big banks didn’t want her to get the job.

“President Barack Obama decided to succumb to those interests, rather than fight for the American people,” Public Citizen President Robert Weissman said in a statement.

Weissman also said:

Warren originated the idea of the bureau. She was a tireless advocate for its inclusion in Wall Street reform legislation and creation of the bureau is the signal achievement of that legislation. She has done an excellent job leading the team that is setting up the agency. She knows the issues better than anyone. She is an unparalleled communicator about the importance of protecting consumers from predatory financial interests.

In appointing Cordray, Obama said:

Rich will be a strong leader for this agency. He has a proven track record of fighting for families during his time as head of the CFPB enforcement division, as Attorney General of Ohio, and throughout his career. He was one of the first senior executives I recruited for the agency, and his hard work and deep commitment make it clear he can make many important contributions in leading it. Rich is smart, he is tough, and he will make a stellar director. I am very pleased for him and very pleased for the CFPB.

The DNA of the new consumer agency is well established. Our mission is clear: No one should be tricked in any financial transaction. Prices and risks should be clear. People should be able to make apples-to-apples comparisons. Fine print should be mowed down, not used to hide nasty surprises. And, everyone – even trillion dollar banks – should follow the law.

The bureau officially begins operation Thursday.

Forty-four Senate Republicans have said that they won’t confirm anyone to the position until the agency is restructured in ways that would undermine its authority to protect consumers, according to Public Citizen.

Improving consumer financial protection is something that has been needed for a long time. The Great Recession certainly showed how consumers were duped into buying homes they couldn't afford and how Wall Street and big banks profited by repackaging and reselling the mortgages. I hope big money interests and conservative politics don't mow down the new agency before it has to provide vital consumer protection.