Warren Now Looks Likely to Get CFPB Nomination
WASHINGTON — The White House keeps insisting it has not made a final choice for director of the Consumer Financial Protection Bureau, but there is a growing expectation that Elizabeth Warren will soon get the nod.
The head of the Independent Community Bankers of America said Monday that he thinks Warren has a "better than even chance" of being nominated, probably within the next two weeks. Several other industry observers put that figure even higher, saying it has become increasingly clear in recent weeks that Obama was leaning toward Warren, even if that meant a contentious nomination battle that may force him to make a recess appointment.
But political analysts said the timing of the nomination could not be better for the president, who is now flush with the political capital after the death of Osama bin Laden.
"In the wake of the bin Laden announcement, the White House has to be brimming with confidence," said Brian Gardner, a political analyst at Keefe, Bruyette & Woods Inc. "That was a significant development for them, and it probably makes it a little bit easier for them to go ahead with a recess appointment if it were to come to that."
Warren was appointed last year to serve as the Treasury's point person in setting up the new agency, and her chances of receiving the formal nomination have waxed and waned since then. Although Republicans have always raised concerns with her as a potential pick, those objections grew louder as a result of Warren's involvement with a pending legal settlement with the top five mortgage servicers.
Still, speculation that Warren will get the job has mounted, and if Obama wants to nominate her he has to do so soon. The Senate has only nine legislative weeks left to confirm a director before the agency officially assumes its rulemaking and enforcement authorities.
In an interview Monday, Cam Fine, president of the Independent Community Bankers of America, said "everyone in town knows that her name is in play and that she's under serious consideration for the position."
He noted that while community banks have some concerns with the CFPB, Warren has gone out of her way to reach out to the community banking sector, holding dozens of meetings with groups around the country. He said she has repeatedly pledged not to impose a new layer of burden on small banks. "All of that strikes community bankers as very favorable," Fine said. "If you take her at her word, she does not want to do anything to harm or impede community banks from servicing their local markets. You would have to look favorably on a nomination, because clearly she understands our model."
Still, Fine said, "We will withhold our judgment on how Ms. Warren would be as a director until her words are put into action."
In a research note published Monday, Jaret Seiberg, an analyst for MF Global Inc.'s Washington Research Group, pegged the odds to 70% that the White House will nominate Warren, as time is running out and no other viable alternatives have emerged.
But that doesn't mean she will get the job. Seiberg said it is nearly impossible for the Senate to confirm her in time. While many banking observers said that will naturally lead the administration to provide Warren with a recess appointment, Seiberg said Obama could also pick another candidate.
"Depending on the reaction to the nomination, the administration may decide it is politically more advantageous to let Republicans kill the Warren nomination and then to name a less controversial candidate to the post," he said. "This allows the administration to charge the GOP opposes consumer protection without incurring the political firestorm that would ensue if he recess-appointed Warren to the job."
Though bin Laden's demise may help Obama politically, Seiberg said it would not provide enough momentum to confirm Warren.
"Killing bin Laden certainly strengthens the president's poll numbers, but at the end of the day, the fight over Elizabeth Warren is not a referendum on the president," he said. "It's a referendum on whether Republicans are comfortable with Professor Warren running the CFPB. I think that she continues to have an uphill fight in combating the perception that she is too radical for Republicans to accept."
Appointing Warren during a recess would further inflame Republican opposition, and may even put off some moderate Democrats, Gardner said.
"There have been some non-financial-related appointments where they have floated people and it didn't go anywhere, and they did go this route," Gardner said. But "even the president's party wouldn't be very happy about it."
Rumors have also circulated that Warren's nomination may come as part of a package of financial services nominations.
Mark Oesterle, a counsel with Reed Smith and former chief counsel to Sen. Richard Shelby, the Banking Committee's top Republican, said that regardless or recent events, each candidate will be vetted under the same process.
"I think the real question is … whether she's demonstrated she's of the mind-set, temperament, background, capability — whatever they were looking for — of doing the job," Oesterle said. "The question of how much political capital the president has to spend remains to be seen."