A Fighting Chance (26 page)

That morning it was Washington hot—steamy, sticky, and nasty. The ceremony was to be held at the Ronald Reagan Building in an amphitheater that could seat more than six hundred people. I wanted to go, but on that same morning, I was scheduled to testify at another Senate hearing as the representative for COP. It seemed all but certain that the hearing would last long past the scheduled time for the signing ceremony, so I figured I’d just have to miss it. Serving as the chair of COP was my job.

At the last minute, I got permission to testify first and then leave the hearing. If I ran, I might make the ceremony just in time—and run is exactly what I did.

For any event involving the president, there’s a point at which the doors are closed, security is locked in place, and that’s it, no one else gets in. But Senator Durbin, who had also been invited to the signing, promised he would get me there. The minute I finished testifying, I dashed out of the hearing room and sprinted down the hall with one of Durbin’s aides. We ran outside and jumped into a black SUV with the senator. Racing along one street and another, we wheeled into the Reagan Building, bailed out of the car and sprinted to the door just ahead of the final lockdown. What a way to start a party!

At the signing ceremony I was seated in the front row, tucked in next to the legendary former Federal Reserve chairman Paul Volcker. Huge cheers greeted President Obama when he took the stage. Everyone was on their feet, clapping and shouting. The president had supported financial reform right from the start, and this was his triumph.

Woo-hoo! The American people had won a great victory. Too bad fireworks weren’t permitted inside the auditorium.

A week or so later, I got a package in the mail. Inside was a note from the president, and it was accompanied by a pen. It was one of the pens he had used to sign the consumer agency into law.

David’s Slingshot

The battle had lasted for more than a year, but this time David thwacked Goliath hard.

From the beginning, the odds had been stacked so completely against us that I doubt Las Vegas would have given anyone a betting line. The big banks were organized and committed. They had PR people, lawyers, lobbyists, researchers, and consultants galore. They presented a united front—virtually no public quarrels or dramatic defections. The financial services industry assembled the best lobbying force money could buy, and it was reported that they ultimately spent more than
$500 million
on lobbying and campaign contributions during their drive to kill the reform bill.

The fight over the consumer agency was a battle between the people and rich and powerful corporations. The big banks didn’t want this agency. They saw it as a direct threat, and their motivation for trying to kill it was simple: They wanted to run their businesses without a watchdog barking at them.

By the usual rules of Washington, the powerful banks should have beaten the people so easily and so thoroughly that the consumer agency would be nothing more than a tiny grease spot on the trouser cuff of a $1,000-an-hour lobbyist.

So how did the people win? There were individual heroes, like the lawmakers who had championed the idea when no one thought it had a prayer of becoming law—Congressmen Brad Miller and Bill Delahunt and Senators Ted Kennedy, Dick Durbin, and Chuck Schumer. When it came time to turn the concept into actual legislation, Barney Frank and Chris Dodd got down in the trenches to twist arms and cut deals and find a way to keep the agency alive. There were also behind-the-scenes heroes, like Michael Barr and Eric Stein, who spent endless hours drafting, negotiating, and redrafting strong language. And there were many champions like Travis Plunkett at Consumer Federation of America and Ed Mierzwinski at PIRG, consumer advocates who have dedicated their lives to fighting for the American people.

But in the end, I think most of the credit for this win goes to the American people. Sometimes they were organized—through nonprofit groups and unions and coalitions. Sometimes they were a little disorganized, as single voices burst forth in funny videos and online blogs and old-fashioned letters to the editor. But organized or not, the people made themselves heard.

I also believe that the people who worked on the consumer side got smarter. When the moment to begin the fight arrived, people moved. There was no hesitation or hanging back. Instead, longtime advocates and first-time volunteers jumped in and fought like there would be no tomorrow. They settled on One Big Idea for protecting consumers. They organized early, and they made every nickel count. They crowd-sourced and tweeted and posted on Facebook. They harnessed volunteers, from high school kids to Hollywood stars. They didn’t allow their efforts to get too complicated, and they stayed clear on what they were fighting for. Most of all, even when the agency was reported dead and the big banks declared victory, nobody gave up.

And they harnessed the energy that swept the nation that year. The financial crisis had rocked this country to its core, and people were furious. They were hungry for a change that didn’t smack of cozy deals for insiders, a change that cleaned up at least one little corner of the world. It was a mad-as-hell moment, and that meant change was possible.

Our democracy has been beaten up pretty badly. The political influence enjoyed by big-bank CEOs and their high-priced lobbyists is shameful. When people talk to me about how broken Washington is, I really can’t argue with them: it’s a mess, and too often its priorities are all wrong. But I hope—I fervently hope—people won’t give up.

Because this time, when the people fought an against-all-odds battle, democracy worked. It was a little dented and scratched, but it worked.

5 | An Agency for the People

T
HE DAY AFTER
the president signed Dodd–Frank and the consumer agency into law, I was on a plane again, this time to Los Angeles.

A few weeks earlier, Amelia and Sushil had called with the results of a sonogram—it’s a boy! But only days after that happy call, they rushed to the emergency room when Amelia went into early labor. The doctors barely managed to stop her contractions, and Amelia was ordered on strict bed rest for the duration of her pregnancy. The baby wasn’t due until November, meaning she would have to spend
five months
on bed rest.

Each day was a victory, as the tiny baby got a little stronger before he made his appearance in the world. But each day was also touch and go, and for much of the summer Amelia was in and out of the hospital. Now Bruce and I were back in Los Angeles, and it was scary to see Amelia flat on her back in bed, strapped to monitors and barely allowed to move.

Amelia is a lot like me—she doesn’t embrace the idea of “rest” very well—so this long confinement felt like punishment. The girls were rattled, struggling to understand why their mother was spending every day in bed. I wanted to be with all of them, caring for my granddaughters and holding Amelia’s hand.

The minute our plane touched down, I called Amelia. Everything was the same. My next call was to Dan, who said that the press was reporting that an open letter had just gone to the White House, urging President Obama to nominate me as the director of the brand-new Consumer Financial Protection Bureau. The letter was signed by fifty-seven members of the House and eleven senators. It was accompanied by a petition that had already been signed by 140,000 people, all supporting me for the job.

Wow: that seemed like a lot of people to even know the name of a new government agency, let alone sign a petition about who ought to be its director. I felt deeply touched that so many people were invested in this agency and that they would trust me to take on this extraordinary job.

During the months I fought for the consumer agency’s creation, I spent almost no time thinking about actually running it. Occasionally, someone would ask me if I wanted the job, but I brushed it off. For a year and a half, I’d been juggling teaching, chairing COP, and doing everything possible to help get the agency passed into law. I didn’t want to think about another job. Now the agency was law, and I needed to get to Los Angeles to be with family.

But my mind was already racing. Somewhere in the middle of fighting for the agency, sometime after the zillionth explanation of what the agency could do, I had gotten really fired up about
doing
it. The director of this new agency would have the chance to get it off to the right start, to set the priorities and to build a structure that would make this thing work. We had fought hard for an agency that would help keep people from getting cheated. The agency could fundamentally change the market for consumer credit. It could forever banish a profit model that was based on tricking people. In time, it could help establish a marketplace that really worked, one where it would be easy to compare products and get the best deal. It might help people like Flora, who fell prey to that nice mortgage broker, or Mr. Estrada and his family, who were shoved out of their home in a matter of weeks. The potential was huge, but the agency needed a strong start.

A strong director could build a strong agency, and now the president would choose someone for the job. The question was: Who?

A Cheerleader?

I think the president was in a bind. (Well, he was in
another
bind; this was hardly his first.) No matter whose name he put forward, he would make somebody unhappy.

On the one hand, he had a petition from a bunch of lawmakers—along with 140,000 people—asking him to pick me. Several media outlets weighed in. A
New York Times
editorial said he should nominate me precisely because the banks would oppose me. Congressman Barney Frank jumped in with both feet (does Barney jump in any other way?) and urged the president to appoint me. A rap video made the rounds starring a supercool-looking guy in cowboy duds waving a lasso and rapping, “Sheriff Warren, she’s what we need, yo.”

On the other hand, the banks hated the idea that I might become the agency’s director, and many of the politicians who had fought against the CFPB were also adamantly opposed to the notion. Republican senator Richard Shelby from Alabama thundered: “I would hope she’s not confirmable. I would not support Warren.… This is a power grab.”

Then Senator Chris Dodd, a lifelong Democrat whose name was at the top of the Dodd–Frank Act, threw cold water on the nomination. He questioned whether I had the administrative skills to manage the agency; he also declared that the agency needed someone who could be confirmed quickly and that I would be hard to confirm. This surprised me—and it hurt, too.

Of course, Senator Dodd had put his finger on an important point. The president would nominate the director of the CFPB, but the position would require approval by the Senate. If enough of the senators didn’t like his choice, they could prevent the president’s nominee from ever coming up for a vote.

Reports also began to surface that Treasury secretary Tim Geithner opposed me for the role. This was not such a big surprise. Over the past year and a half, Secretary Geithner and I had disagreed—often quite publicly—about many aspects of the TARP bailout. But Geithner’s opinion was critical. The law required that the new agency be operated from within the Treasury Department until the agency had a permanent director. That meant Geithner was himself in charge of the agency immediately after Dodd–Frank was enacted.

That summer, I had a string of conversations with the president’s three senior advisors, Valerie Jarrett, Pete Rouse, and David Axelrod. They were always very thoughtful, and it was clear they genuinely wanted to give the agency the strongest possible start. But it was also clear that the White House was under tremendous pressure from a number of different directions. Ultimately, this would be the president’s decision alone.

The push and pull in Washington reflected the debate outside. Like it or not, the nomination had become a symbol in the larger fight over financial reform, and I had become a political lightning rod. I would attract a lot of ire from the big banks, and the banks have lots of friends on Capitol Hill.

No doubt some people were also worried that I might be a little too independent or that I couldn’t be trusted not to mouth off to the press. After all, I had called for “blood and teeth on the floor” during the Dodd–Frank battles—not the kind of rhetoric some people expect from a reputable agency director. There was also quite a bit of talk about whether Tim Geithner and I could get along. Nobody wanted internal discord that could somehow be embarrassing to the president.

And although no one said it directly, it was generally known that some of the president’s advisors preferred to avoid confrontation with the big banks, and they weren’t thrilled by the idea of an aggressive new leader for an aggressive new agency. Various alternative proposals began to float around the White House. Would I agree to be a part-time advisor to the new agency? What about becoming the agency’s new public spokesperson while someone else made the real decisions?

One of the president’s advisors even suggested that someone else be named director, while I could serve as “cheerleader” for the new agency. I assume that was meant as a metaphor, but I had to wonder: Cheerleader? Would the same suggestion have been made to a man in my position? I did not rush out to buy pom-poms.

The weeks went on, but nothing was resolved. According to one of his senior advisors, the president was “holding his cards close to his vest.”

A Meeting in the Oval Office

In mid-August, I was invited to the Oval Office for a meeting. I had never seen the Oval Office except in pictures, so as soon as I stepped inside I wanted to take a minute to look around at one of the most famous rooms in the world. It was light, with lots of soft gold and pale colors. But all I had time for was a quick impression, because I couldn’t stand and gawk. The president of the United States was talking to me.

“Is the agency really good?” the president asked. “
Really
good?”

He had swept me from the outer office into the Oval Office with a cheerful, “Elizabeth!” and a familiar hug, even though we had met only a handful of times before. He asked if I wanted something to drink or eat and then joked about the terrific White House kitchen and how he was like a movie-version president who was amazed—and tickled—to be able to order whatever food he wanted. But that took only seconds. Valerie Jarrett, the president’s senior advisor and longtime friend, was the only other person in the meeting. She and I were barely inside the office when the president got serious. He wanted to know if the new consumer agency was strong enough to get the job done.