Before 2011, few people had heard of Elizabeth Warren. Those who had included Time magazine, which named her one of the new “sheriffs” in town to clean up Washington and Wall Street, and Yahoo! Year in Review 2010, which saw her buzz rise in a burgeoning financial uprising.
That name, though, became a hot political topic when President Obama passed her over to lead the new government agency she fought to create, the Consumer Financial Protection Bureau (CFPB). The move appeared to be more than snuffing out a high-profile consumer voice. Along with the departure of Sheila Bair at the FDIC, it was an end of two potentially interesting experiments: bringing back policy wonks in a bickering political atmosphere and having a female presence among the top economic advisers.
Warren, a law school professor born and raised in Oklahoma, decided in 1979 to study bankruptcy. Just the year before, Congress passed a law making it easier to file for bankruptcy, and she wanted to find out the root causes for filing.
The former Sunday school teacher expected cheaters, people trying to game the system. Instead, she concluded that many filings resulted from people losing their jobs, illness at home, and confusing and complicated financial documents with “tricks and traps” in the fine print. That was when she developed strong feelings about consumer advocacy. By 2009, she was known as an expert in debt and the middle class — a subject that would become a political firestorm in 2011.
An invitation to politics
Warren crossed over into politics when she advised the new National Bankruptcy Review Commission. She battled against legislation that would have made it harder for people to declare bankruptcy. She considered the version of the bill that passed in 2005 a defeat, which fueled her fire even further.
In 2008, Senate Majority Leader Harry Reid asked her to head the congressional panel overseeing the bailouts issued as part of the Troubled Asset Relief Program. She set herself apart in that role, especially in one televised hearing where she demanded answers from Treasury Secretary Timothy Geithner on where exactly AIG’s bailout money went (see a clip on YouTube).
Throughout that time she was working on creating the CFPB, which was eventually formed with the sweeping Dodd-Frank financial reform bill, enacted in July 2010. Obama asked the janitor’s daughter to be interim leader. When it came time to appoint the head of the new agency, Warren was not chosen.
Obama picked Richard Cordray instead. Opponents of the agency had made clear their strong stance against the regulation bureau and the woman who created it. Senate GOP members said the new agency had “unfettered authority” over businesses and banks, which would stifle the free market, while advocates said that simplified and clearer processes would benefit average Americans.
Cordray’s appointment angered some who created petitions and got hundreds of thousands of signatures urging Obama to have Warren head the CFPB. Obama was only too aware of Republican opposition, hinting that the battle would have been too intense. “She’s become perhaps the leading voice in our country on behalf of consumers,” he said. “She’s done it while facing some very tough opposition.”
One high-ranking Obama official gave a deeper look at how politics work in Washington. “I really like Elizabeth and think she would have been a great choice, but there was always something outsider about her that scared people here,” the anonymous staffer told the Daily Beast. “They couldn’t trust her because she wasn’t one of them.”
Warren is now taking her fight to a new arena: She is campaigning against Massachusetts Republican incumbent Scott Brown in 2012 for a Senate seat. Some see her as a top contender who could unseat Brown; others, as a November viral video showed, have condemned her for being a socialist. In either case, the act of running is an interesting strategy: If the Senate doesn’t approve you, then join it.
Torrey AndersonSchoepe is a news and social media editor for Yahoo! News. She also follows business, economic, and financial news and has written a variety of stories for Yahoo! News, including an in-depth profile on the last man out of the South Tower of the World Trade Center for the 10th anniversary of 9/11. Follow her on Twitter @torrey_ynews and subscribe to her on Facebook.