No. 7: Elizabeth Warren

If the financial crisis and recession of the past couple of years have taught us anything, it’s that we’re all in this together.

You or a family member lost a job. College has become too expensive. Credit card debt is never-ending. Foreclosure is a legitimate threat. Plenty of people would admit that some financial wounds have been self-inflicted: We borrowed too much, too fast, and believed that home prices would rise forever.

There’s another part of the story, though, the part that can’t be blamed on regular people: exotic unregulated securities, unfair lending practices, and service fees that border on usury, for example. The degree to which negligence, malfeasance, and questionable business practices led to the downturn is impossible to pinpoint. That those factors contributed isn’t in question, and that’s where the need for consumer protection comes in.

That may explain the reassuring appeal of 61-year-old Harvard law professor named Elizabeth Warren. Lawmakers in Washington have responded by passing legislation and creating agencies with the intent of guaranteeing ordinary Americans a fair shake in the economy. Warren is one of the key players in the new order.

She’s a member of SmartMoney’s Power 30, and Time named her one of the Sheriffs of Wall Street. Warren has been a familiar folksy face (and voice) on talk shows, able to pinpoint the most baffling financial chicanery and put panic in perspective. Little wonder she inspired a rap tribute. Media accolades aside, she’s got a job to do, and it’s a big one. For the past two years, she has been front and center in the effort to prevent another breakdown from occurring now and in the future.

We started getting to know long-term consumer advocate Warren in November 2008, when she was chosen to lead a congressional oversight panel that was administering the bank bailout. In September of this year, President Obama named her special adviser to the Consumer Financial Protection Bureau (CFPB), a new agency meant to keep regular folks from losing control of their financial situations.

She’s admitted that she’s enthusiastic about the post, but the Oklahoma-born, ex-Sunday schoolteacher seems well aware that the task before her is gargantuan. She noted at the time of her appointment: “If the CFPB can succeed at leveling the playing field, we can go a long way toward repairing a gaping hole in the budgets of millions of families. But nobody has ever thought or argued that the consumer bureau can fix everything. Lost jobs, stagnant incomes, rising costs for college, dwindling retirement savings — there’s a lot of work to be done.”

You have to start somewhere, and based on Warren’s experience of the past two years, she has the hallmarks of a strong choice, even if she’s not a perfect one.

Her team is coming together, and bankers and lenders are monitoring the developments. The rest of us should be, too. That might be your money being saved, after all.

–Chris Nichols

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