A Fighting Chance (28 page)

On my first day on the job, Secretary Geithner asked me out to lunch. When I showed up in his office, he said, “I have a present for you.” He held out a cop’s hat. Perfect!

Heading for a restaurant that he said was one of his favorites, we bounced along in the backseat of an SUV driven—very fast—by one of his security guys. I had put on my seat belt before the car pulled out of the Treasury encampment, but as we sped along I noticed that the secretary was still unbelted. Like a bossy third-grade teacher, I looked at him and said, “Put on your seat belt, Mr. Secretary.”

Like a naughty kid, he looked back and said, “I don’t have to.”

He explained with obvious pride that the car was bulletproof and that the driver and his partner were both highly trained and carried big guns. “We’re safe here,” he said in a tone meant to end the conversation.

“What? Are you kidding?” I said. “What good is that if we get hit and this thing turns over a few times and you smash your head against that great bulletproof window?” I think I may have raised my voice a little.

He didn’t put on his seat belt all the way to the restaurant.

We sat at a table in the back, and while we ate, we debated a number of issues involving markets, market failures, and the role of government. More than once, he said he was surprised that I believed so strongly in markets. More than once, I emphasized that markets are great—but only if there really is a level playing field where both sellers and their customers understand the terms of the deal.

On the drive back to the office, Secretary Geithner put on his seat belt.

Late in the day, several Treasury lawyers came to call. This session started like all the other get-to-know-you meetings I’d had that day. But the lawyers were all carrying file folders, which put me on alert. No one makes a social call carrying a file folder.

After we shook hands all around and everyone was seated, one of the lawyers said he had some bad news. No one made eye contact with me. Reluctantly, a second lawyer explained that the law had a little glitch. With that, my visitors reached into their file folders and pulled out photocopies of a single page from the long Dodd–Frank Act. It seemed there was a one-word error: a provision setting up the consumer agency referred to powers under this “subtitle” rather than powers under this “title.”

Huh. It was just one word, yet the difference was huge.

The statutory language was a tangle, but using the wrong word in this sentence meant that the new agency would likely get its full powers only after a director was confirmed by the Senate (or, as we eventually figured out, appointed by the president during a congressional recess). The Department of the Treasury had some ability to get the agency moving before there was a director, but its power would be limited.

One little word. I had one little thought: Oh crap.

The lawyers handed me a copy, and I read the language again and again. Could it be interpreted another way? Apparently not.

Okay, but could the mistake be corrected by getting Congress to provide a technical fix? Nope. Evidently, someone had already quietly reached out to friends in Congress to see if a fix might be possible, but everyone agreed that the politics made it impossible to correct the error.

And the final question: How had this happened? The lawyers said they didn’t know. I pushed a little, but at this point it didn’t really matter. The bill was hundreds of pages long, and as different staffers and committees negotiated over this sentence and that paragraph, the text of the legislation had probably gone through thousands of revisions. Mistakes happen, and what was done was done. Now we had to live with it.

Bruce was teaching classes that week, so he had already gone back to Massachusetts. I let myself into the apartment late at night. I checked in by phone with Amelia and Sushil, as I did every day. She was still flat on her back in bed. One more day had come and gone, and the baby had grown just a little bigger and a little stronger. Amelia’s due date was now two months away. I imagined the tiny baby who would soon be born, and I said one more silent prayer, asking that he wait just a little longer before making his appearance.

Will You Behave Yourself?

Less than two weeks after starting my new job, I was scheduled to speak to the Financial Services Roundtable, a group of CEOs of big-deal banks, mortgage companies, and the like. They were the titans behind the lobbyists, the ones who had fought tooth and nail against the agency. My sweet husband thought I was nuts to show up at a place where a posse of CEOs would be armed with knives and forks.

But the director of the Roundtable was Steve Bartlett, a former congressman who was cheerful, charming, and committed to the idea that in politics, nothing is permanent, not even enemies. I appreciated Steve’s invitation, and I welcomed the chance to talk with anyone about the new agency, including CEOs of big banks. Besides, it was a chance to make the argument that the new agency was good for competition—and good for banks that wanted to make their money from selling honest products.

Luckily, Elizabeth Vale came with me. After a successful career in banking, Elizabeth had served the president by doing extraordinary work in business outreach. She agreed to leave her very cool job in the White House to help us launch the new agency, and she was now my guide in what felt like a trip to a foreign land.

The dinner was held in a huge ballroom filled with dinner tables laden with elaborate centerpieces, heavy linens, multiple wineglasses, and little presents wrapped with fancy paper. I was seated next to Jamie Dimon, the famous CEO of JPMorgan Chase.

Dimon is a sturdy man, solidly built and supremely self-confident. I’d never met him in person, but I’d already taken him on by name in a
Wall Street Journal
op-ed. I’d quoted his remark that a financial crisis every five to seven years was inevitable and given my own blunt assessment: He was wrong. The real cause of the crash was not some inevitable cycle; this crash was the direct consequence of years of deliberate deregulation and the resulting dangerous actions of the big banks. I’d repeated this view multiple times, saying that we needed a cop on the beat to make sure that a crash didn’t happen again.

I wondered if Dimon would argue with me over the salad course, but he didn’t. In fact, there were no arguments of any sort. Dimon did most of the talking, complaining loudly about how painful it was for him to be a Democrat when the Democrats were trying to regulate the banks. He talked about his many, many conversations with the president and offered details about the advice he had repeatedly given him.

After a while, our host stood up, thanked everyone, noted a few of the Roundtable’s accomplishments, and then turned to the next item on the agenda. He started by calling out table one, recognizing the member of Congress seated with a group of banking CEOs. A congressman stood up, and everyone applauded. He must be really close to people in the banking industry, I thought. Then it was on to table two. The host announced the name and home state of another member of Congress, the congressman stood and waved, and everyone applauded. And on it went. I was amazed by how many tables in the huge ballroom had at least one senator or representative sitting with the CEOs.

That evening was not the first time the Roundtable had found a way to make nice to members of Congress. Over the preceding decade, the financial industry had spent more than $2 billion in political contributions. And the Roundtable itself had spent more than $70 million on lobbying just to make sure their friends knew where they stood on each detail of banking regulation.

I don’t remember exactly which senators and representatives were there that night, but I do recall being surprised by who was there and how long they stayed. I’d been to a few Washington dinners by this point—mostly dinners honoring consumer advocates—and sometimes a member of Congress made a quick in-and-out appearance. But I’d never seen anything like this.

All those tables and all those lawmakers. Two hours of dinner and conversation. That’s a lot of access.

When it was finally time for my speech, the Roundtable’s president smiled mischievously and said that since I was the scheduled speaker, the knives had been removed from the table settings.

I’m not sure if anyone laughed, but at least now Bruce would have no reason to worry about the knives.

In my speech, I went back to what Joseph Kennedy Sr. had said in the 1930s after he was sworn in to set up the brand new Securities and Exchange Commission during the darkest hours of the Great Depression:

Everybody says that what business needs is confidence. I agree. Confidence that if business does the right thing it will be protected and given a chance to live, make profits and grow, helping itself and helping the country.

Standing before all those bankers and all those people from Congress, I said I believed Joe Kennedy had it exactly right. I underlined his point with my own: “Good regulations create an opportunity for good businesses to thrive.”

Polite applause, and soon the dinner was over. On the way out, one banker from the Midwest said to me, “We just want to know if you are going to behave yourself.”

I smiled and didn’t say anything.

Arizona Sunset or Terra Cotta?

My first few weeks on the job were loaded with meetings, job interviews, speeches, and more meetings.

In addition to Alyssa, I had brought along three new people to help me get started. Dan Geldon shifted jobs yet again—this was now his fourth job in two years—to become my senior advisor, which meant that he helped set priorities, oversaw our media and legislative affairs work, worked on policy issues, and basically did whatever else needed doing.

Raj Date had established a successful career in banking, but then he did something that was considered pretty unusual in the banking circles: He started a think tank and wrote long, technical papers about everything he thought was wrong with the banking system. During the previous months, he had also joined forces with the AFR to help fight for a strong consumer agency, and now Raj was going to set up our research and regulatory work. And Peter Jackson, who had done a great job handling press at COP, agreed to take on the same role for the new agency.

Right from the start, we were all working flat out. We would do interviews and meetings from early morning until late at night, then head back to our respective apartments and do our homework to get ready for the next day. We were drafting the agency’s basic design—the architecture that would shape its work for decades. We met with other agency heads and with the consumer groups and financial institutions that would be most affected. I scheduled regular meetings with Secretary Geithner and his staff to keep them up-to-date on our progress.

As the CFPB began to take shape, there was a fair amount of press coverage, most of it about the new agency’s work. But one tiny piece appeared in late October that took me by surprise.

NEW PAINT JOB—We also hear that while Warren is out west, her Treasury office is getting a makeover (Warren will have digs both at Treasury and the CFPB’s L Street headquarters). That’s something of a rarity for Treasury officials, who usually leave their offices as-is. There is much internal debate as to exactly what color it is that is going up on Warren’s walls. One person called it “Arizona sunset,” another “terra cotta.”

A headline the next day took Treasury to task for the leak:
ARE TREASURY’S KNIVES COMING OUT AGAINST ELIZABETH WARREN?
The reporter called the item “petty.” (You think?) But he also noted that there had been a series of nasty little items leaking from Treasury since I’d arrived, all aimed at painting me “as an ego-centric fluff-monger, not a serious policymaker.” Oh, yuck.

I tried to think about how the article had come about. A Treasury employee had come by and offered to schedule my office for routine repainting; he showed Alyssa and me a book with some colors and we had picked one. The conversation was short, and I could barely remember it in the flurry of those early weeks.

After the story appeared, Secretary Geithner called. We didn’t have a scheduled meeting, so this was a surprise. He was direct: I’m sorry about the story about painting your office.

I brushed it off, but the secretary was insistent. No, he said, he was really sorry. It was wrong.

He obviously had nothing to do with the article, but he knew that someone in his vast department was to blame. Treasury employed a lot of people, and the secretary couldn’t possibly know what they were doing every minute of every day. Nonetheless, he told me there would never be another nasty leak about me while I was trying to do my job. He said, “I give you my word on that.”

I knew Tim hadn’t chosen me for this role. I knew I had been pushed on him by the president. And I had begun to understand that he could probably take me down with carefully placed traps and leaks if he wanted to. But when he gave me his promise, I believed him.

I don’t know what Tim did, and we never spoke of it again, but I don’t remember there ever being another nasty leak.

Welcome to the World, A-Mann

In late October, I was scheduled to give a lecture at Berkeley about the new agency. The day of the speech, I got the call I’d been waiting for.

Amelia was thirty-seven weeks pregnant, and the baby would wait no longer. Wonder of wonders: after all those months of worrying that he would be born prematurely and be too small to survive, when he came into the world he was chubby! Weighing in at a solid eight pounds six ounces, he had pudgy thighs and a round little tummy. I don’t think I’ve ever been so delighted about a roll of fat in my entire life.

Bruce and I flew to Los Angeles the next day. We wrapped the baby in a pumpkin costume—what else would a chubby Halloween baby wear?—and took the girls out trick-or-treating.

I love Halloween—dressing up, trick-or-treating, handing candy out at the door. (Confession: I have a real weakness for Mounds.) One year Lavinia talked me into becoming “the Sparkle Queen,” complete with a pink glitter wig—all so that I would complement her “Sparkle Princess” costume. (Fortunately, I believe all the relevant photos from that Halloween have been deleted.) I’ve also been a lost sheep for her Little Bo Peep. This year we dressed up as a rose (Lavinia), Cleopatra (Octavia), a pumpkin (tiny baby brother), the Mad Hatter (Bruce), and Robin Hood (me, tongue firmly in cheek).