OCT 16, 2012 9:16pm ET

Former FDIC Chief Sheila Bair Endorses Elizabeth Warren for Senate

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Former Federal Deposit Insurance Corp. Chairman Sheila Bair said Tuesday that she is endorsing Elizabeth Warren in her Massachusetts Senate battle against Republican incumbent Scott Brown.

In an interview, Bair praised Warren's intelligence and grasp of financial issues.

"I think she'll be independent," Bair said. "I think she'd be willing to reach compromises to get legislation done. She realizes the government has a responsibility to govern. She works hard and she's whip smart too."

Bankers have made Warren their top focus in the Senate races, with many donating to Brown—one of the few Republican supporters of the Dodd-Frank Act—in an effort to ensure the Harvard law professor does not make it to Congress.

Warren provoked the ire of many in the banking industry for proposing the creation of the Consumer Financial Protection Bureau, which was eventually made part of the Dodd-Frank Act.

But Bair said the industry's anger is undeserved.

"For the life of me, I do not understand why they vilify her so," Bair said. "I've never seen her as that far out there on financial issues. I don't see that at all. She understands the bank business model. She wants to protect the consumer—what's wrong with that? I think this fear of her is misplaced."

Bair, a Republican, said she worked closely with Warren when she was part of an FDIC panel on economic inclusion. Warren, she said, took the issue seriously and provided a lot of time and "was the source of great input."

While many community banks view Warren as a villain, Bair said the candidate is cognizant of the challenges facing small institutions.

"She was very solicitous of them when she was setting up the CFPB," Bair said. "I think she's very sensitive to community banks and to their concerns."

If Warren wins, Bair predicted she will be a powerful force in Congress.

"Given her stature and considerable public persona, I think she will be a very influential senator for Massachusetts," Bair said.

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