On September 17th, at the White House, President Barack Obama announced the appointment of Elizabeth Warren as an Assistant to the President and Special Adviser to the Secretary of the Treasury. This decision will allow Elizabeth Warren to act as an interim head of the Consumer Financial Protection Bureau (CFPB) and will enable her to begin setting up the agency immediately. The recently signed Dodd-Frank financial reform law gives the Treasury temporary oversight of the bureau until an official director is named. The Harvard law professor’s new appointment does not require the approval of the Senate.

This appointment as the interim head of the CFPB will not give her the power to start drafting regulations, but will allow her to set up the CFPB public policies, hire employees, establish legal departments and find office space. She will also set up a complaint center for consumers, which consumer advocacy groups say is an important first step in enforcing the new consumer protections contemplated by the new Dodd-Frank legislation.

The CFPB, the “watchdog agency” established under the new Dodd-Frank law, will set rules on credit cards, mortgages and other financial products in order to protect consumer’s interests. But The White House said that Warren will have a broad array of duties, advising President Obama on “policies and programs that are designed to protect the financial interests of middle-class families”. She will be responsible for organizing the powerful new consumer agency – the CFPB, which Warren first suggested in 2007. Warren will have 10 months to accomplish the task. The Treasury Department has indicated that existing enforcement, examination and rule-writing authority would be targeted to transfer to the CFPB by July 21, 2011. The Act gave the Treasury between six to twelve months to transfer these powers, and the transfer date can be extended to a later time if the Treasury Secretary decides additional time is needed.  Source:  Microbuilt Corporation

BIIA Newsletter October II – 2010 Issue