Elizabeth Warren: An Okie in Washington riles Wall Street Oklahoma native Elizabeth Warren is among the leading candidates to head the newly minted Consumer Financial Protection Bureau. Some financial insiders are not pleased.

Published: August 1, 2010

NORMAN — At ease amid noisy young relatives and family photos in her brother's Norman home, Elizabeth Warren doesn't seem like a person at the center of a fierce political battle that stretches from Wall Street to the White House.

But Warren, an Oklahoma native who is a leading candidate to head the Consumer Financial Protection Bureau that she helped create, has been the target of invective from financial insiders who fear her ideas.

Anton Schutz, president of Mendon Capital Advisers, last week said in a Reuters story: "I get disgusted every time I hear her speak." Warren, 61, is baffled by the invective.

"I have never run into anything like what has happened the past few weeks," she said. "I found myself thinking: So what is it I say? I'd really like the content."

Her goal, she said, is what it has been throughout the 20 years that she's been researching financial data, particularly as they relate to American consumers, whom she believes have been victimized by predatory practices.

"I want to make it so regular families can read a credit card agreement in four or five minutes and fully understand what the terms are. No tricks. No traps. No things that you don't figure out what's happening until after it bites you and they charge you the $39 and raise your interest rate to 29 percent," she said.

Financial insiders point to Warren's lack of industry experience as evidence that she doesn't grasp the complexities of their business or the impact regulatory changes would have.

"I do understand," she said. "It's that we disagree. There are some things that I don't think are all right, and people who are making money off of it think it's just fine."

Last week, White House press secretary Robert Gibbs labeled Warren "a terrific candidate" to head the Consumer Financial Protection Bureau. Asked if "Wall Street opposition" to Warren's potential nomination would factor into the president's decision, Gibbs said: "I don't think any criticism in any way by anybody would disqualify her."

Always an Okie

Warren attended grade school in Norman, then skipped sixth grade when her family moved to Oklahoma City. Living on NW 25 Street, she learned to drive the family Studebaker in the parking lot of the brand new Shepherd Mall.

She graduated from Northwest Classen at 16 as a debate champ, which earned her a college scholarship.

She became a teacher to brain-injured children, but felt stifled by the administrative constraints of the New Jersey public school where she worked. During a Christmas visit to Oklahoma City, her former high school debate classmates urged her to attend law school.

After operating a private law practice, Warren returned to her first love of teaching.

"As a teacher at that level, you do research — that's just part of the job," she said. "The area where I was teaching were all the money courses — commercial law, contract law, bankruptcy law. That's where my research was, and that's when I started doing research on families that went broke."

It's a topic she knows something about. Before Warren was born, her parents lost most of their savings when a partner in a planned car dealership in Seminole absconded with their money.

Her father, a self-taught pilot who was a flight instructor in Muskogee during World War II, worked as a traveling salesman and in Oklahoma City, at Montgomery Ward. He was demoted after suffering a heart attack, and later took a job as a maintenance worker at an apartment house. The working-class family couldn't afford to send Warren to kindergarten, which at the time was offered only at private schools.

"Sure it was partly about my family, but it was about millions of other families," the Harvard law professor said of her research. "That was the work I started doing. That's how I ended up where I am today."

Warren has written numerous books and academic articles. Her work uncovered the fact that most American consumer bankruptcies are not filed by financial freeloaders, but by people whose finances have unraveled due to divorce, death or health crises.

Not a politician

Warren's public profile grew through her consumer advocacy, although she was unsuccessful in her attempts to derail the 2005 bankruptcy reform pushed by the financial industry.

In the wake of the financial crisis, Warren was appointed to head the Congressional Oversight Panel charged with reviewing the Treasury Deparment's implementation of the $700 billion Troubled Assets Relief Program, commonly called TARP.

Her Oklahoma upbringing is evident in the blunt, basic questions she asks during hearings, and she recognizes her style differs from the typical Washington way.

"These people aren't used to simple questions. They don't expect to hear them and they somehow, when you do (ask them), act like you're not half-bright or you're somehow asking something nasty," she said.

When asked if TARP has been a successful use of taxpayer dollars, Warren doesn't evoke economic theories or delve into the fallout from overly complex financial instruments.

"It's like having a garage sale and you know what you paid for each thing you're now going to resell and the good stuff is resold at a profit so it looks like you're making good money. Yeah, but how about the stuff that's still left behind? That's where the problem is — AIG, GMAC, GM, Chrysler, Citi," she said. "How fully the American taxpayer gets paid back, we don't have enough information to tell for sure."

While her plainspoken ways may annoy some, Warren is no fan of business as usual in Washington.

"What's begun to hit me is that people have enormous power and yet nobody's ever responsible," she said. "How does that happen? Nobody's ever accountable. Nothing is ever anybody's fault. I hope that the way this new agency works out is not just that it has the tools to get things done — it's accountable for making change."

Warren pushed for agency

For several years, Warren has called for the creation of a government agency charged with protecting American consumers on financial matters. She repeatedly has noted that toasters are more strongly regulated than financial products.

She admits her major role in the creation of such an agency is "pretty cool." While reluctant to discuss her potential nomination as head of the Consumer Financial Protection Bureau, she acknowledges that the choice of who leads the agency is an important one.

"I care about the changes that need to be made for middle-class families," she said. "That's what this new agency is all about. It's what my work has been about for 20 years. ... the lights suddenly come on because we're talking about Washington and some big stir there, but the truth is, for me this is just a logical extension of what I've been working on for more than 20 years."

However the political matters work out, Warren will continue to return to Oklahoma several times a year.

"My brother David is the best storyteller God has put on this earth," she said. "There's nothing I'd rather do than sit on the back porch and listen to him tell the story of the time they put the pig on the motorcycle and ran it down the main hall of Norman High."

"I'll always be an Okie."


Age: 61

Occupation: Harvard Law School Leo Gottlieb Professor of Law, currently on leave. Chair of the Congressional Oversight Panel that reviews implementation of the government's $700 billion Troubled Asset Relief Program.

Previous employers: The University of Pennsylvania Law School, 1990-95; The University of Texas School of Law, 1981-87; The University of Houston Law Center, 1978-83. The University of Michigan, 1985. Rutgers School of Law (Newark). 1977-78.

Books written: "All Your Worth: The Ultimate Lifetime Money Plan," 2005 (A New York Times bestseller). "The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke," 2003. "The Fragile Middle Class: Americans In Debt," 2000. "As We Forgive Our Debtors: Consumer Credit and Bankruptcy in America," 1989. Plus about a dozen academic legal books.

Recognition: Named one of Time magazine's "100 Most Influential People in the World" in 2009 and 2010. Named "Bostonian of the Year" in 2009.

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