CFPB Founder Elizabeth Warren Wins Senate Seat, Will Play Role on Banking Issues
Elizabeth Warren, a frequent critic of mortgage brokers and who founded the Consumer Financial Protection Bureau, won her fight for a Senate seat late Tuesday, marking the end of a grueling and expensive campaign.
The financial services industry has been watching her race closely, fearful that Warren may continue her harsh attacks on banks, residential lenders, and Wall Street as a member of Congress and press for stricter regulations.
Bankers across the country donated money to Warren's opponent, Republican Sen. Scott Brown, but were ultimately unable to blunt the momentum her campaign received after she spoke in a prime-time address at the Democratic National Convention.
"It's hard to be enthusiastic about someone who thinks you're a bad person. They've taken her attacks on the financial services industry personally," said Mark Calabria, director of financial regulation studies at the Cato Institute. "She has made herself into a symbol of the left, and has done so at the expense of the banking industry."
While it's still too early to know what course Warren will chart in the Senate–or whether she may join the Banking Committee–industry representatives were already speculating that she may have a significant impact.
To be sure, some argue that Warren will be less outspoken and more conciliatory once in the Senate, particularly given her stature as a first-term lawmaker in a chamber that still puts a lot of emphasis on seniority.
"The Senate is the Senate, and it doesn't change its folkways and customs for anyone. Was Hillary Clinton handed the key to the Senate treasure, even though she was one of the two or three best known senators instantly in 2001? Not a chance. She had to work her way up in the Senate structure in all the usual ways," said Larry Sabato, director of the Center for Politics at the University of Virginia.
"It will be exactly the same for Elizabeth Warren. In fact, if her staff is serving her well, they'll point to Hillary, Al Franken, and many other celebrity senators as examples of how it must be done."
But others predict that Warren will be more willing to wade in publicly on issues dear to her, such as oversight of the CFPB–a subject Republicans are anxious to address.
"Sometimes in the Senate you need someone who's willing to put everything on the line to protect a program and shut the place down," said Edward Mills, a financial policy analyst at FBR Capital Markets and former Hill staffer. "For her, CFPB and protection against changes that would weaken its power would be an issue big enough to do that."
Republicans sought last year to change the leadership structure of the agency, eliminating its director and replacing it with a five-member board. The GOP also wants to subject the CFPB to the appropriations process and make it easier for the banking regulators to overrule the consumer agency.
Warren would undoubtedly fight any such efforts.