Wall Street gadfly Warren stands good chance of Senate banking seat

WASHINGTON Thu Nov 8, 2012 9:09pm EST

Democratic candidate for the U.S. Senate seat for Massachusetts Elizabeth Warren addresses supporters during her victory rally in Boston, Massachusetts, November 6, 2012. REUTERS/Gretchen Ertl

Democratic candidate for the U.S. Senate seat for Massachusetts Elizabeth Warren addresses supporters during her victory rally in Boston, Massachusetts, November 6, 2012.

Credit: Reuters/Gretchen Ertl

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WASHINGTON (Reuters) - The chances are good, but not guaranteed, that Elizabeth Warren will secure a highly coveted seat on the Senate Banking Committee, a move that would dramatically elevate her campaign against Wall Street excess.

Senior Senate Democratic aides, speaking on condition of anonymity, said the Massachusetts senator-elect is a logical fit for the committee, even though it is rare for a freshman senator to get such a plum assignment.

If she gets the slot, Warren's bully pulpit would be replaced with real power.

The bipartisan panel can greatly influence policy decisions through its oversight of financial services, international trade, insurance, housing, securities and economic issues.

Warren, who has called for breaking up the big banks, could move to block legislative tweaks to the 2010 Dodd-Frank financial oversight law that would blunt the full impact of profit-pummeling reforms.

She would also be able to forcefully push for regulators to use all the powers available to them to write strict interpretations of rules.

That could mean stronger curbs on Wall Street trading, higher capital buffers and rules that would compel mega-banks to shrink.

A spokeswoman for Warren did not respond to numerous requests for comment.

Senate Majority Leader Harry Reid likely won't start considering committee assignments until the new year. Still, one Senate Democratic aide predicted that if Warren wants to be on the banking panel, the odds are good she'll get it.

"The leadership and committee chairmen usually work together to try to accommodate incoming senators' preferences, within reason," the aide told Reuters.

"If Senator-elect Warren indicates she'd like to serve on the banking committee, given her prominent work on those issues, she would certainly have a very good shot."

ENEMY NO. 1

Warren, a Harvard law professor, is credited as the prime architect of the Consumer Financial Protection Bureau, an agency created by Dodd-Frank.

She rose to national prominence in 2008 when she was named chief watchdog of TARP, the $700 billion taxpayer bailout of the U.S. financial system.

She made regular television appearances railing against Wall Street and mega-banks, a habit that made her bankers' public enemy No. 1.

Warren then became the acting director of the CFPB, but President Barack Obama dropped the idea of formally nominating her for the post, in large part because there was only a slim chance that the Senate she is now joining would confirm her.

Her victory on Tuesday over Republican incumbent Senator Scott Brown is unleashing fresh nervousness in the financial services sector.

"The biggest impact I think would be for the mortgage and credit card industries," said Joseph Engelhard, a senior vice president for Capital Alpha. "She'll be pushing the CFPB to be a really tough regulator and examiner of the big banks."

Senator Jack Reed, a senior Democrat on the Senate Banking Committee, declined to make a prediction on Warren, saying he thinks she will have an important impact on financial services policy regardless of where she lands.

"I'm just glad she is in the Senate - I'll settle for that," Reed said in an interview Wednesday. "She is very talented and she has got great experience. There are very few people that come to this body with literally a lifetime of experience and detailed knowledge about ... financial regulatory issues."

Retiring U.S. Representative Barney Frank, a Democrat and the co-author of Dodd-Frank, said Warren could be a critical defender of cherished reforms against Republican attacks.

"She'll have a very important role there. I assume she'll get on the Banking Committee," Frank said in an interview on Wednesday.

TOUGH COMPETITION

Still, a seat on Senate Banking is still not guaranteed, one senior Democratic committee aide warned.

There are numerous factors that go into committee assignments, from just the basic math of how an election outcome will change a committee's ratio to whether there is competition among current sitting senators for openings.

At least two Democratic spots on the panel have opened up after both Senators Herb Kohl of Wisconsin and Daniel Akaka of Hawaii decided to leave the Senate.

But aides and analysts who follow the Hill say that Warren may have some tough competition for the slots.

Names being floated around town include Democratic Senator Chris Coons of Delaware, as well as Democratic Senator Kirsten Gillibrand of New York, just to name two.

Jason Rosenstock, the director of government relations for ML Strategies, said that generally incoming freshmen are not placed on priority "A" committees like banking, though more recently there have been exceptions and first-time senators have landed seats.

He also noted that Warren could be a prime candidate for other committees like Senate Judiciary because of Warren's in-depth knowledge of bankruptcy law.

Regardless of where Warren lands, most observers agree that Warren won't need a banking seat to get her position across. But some doubt her larger impact.

"She's just one of 100 senators," said Harvey Pitt, a former Republican chairman of the U.S. Securities and Exchange Commission.

"Yes, she can kick up a fuss and raise significant issues, but at the end of the day, all she can do is try to embarrass people or create difficulties. By herself it's going to be very difficult for her to have very much of an impact."

(Reporting by Sarah N. Lynch; additional reporting by Emily Stephenson and Rachelle Younglai in Washington and Suzanne Barlyn in New York; Editing by Phil Berlowitz)

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Comments (13)
flashrooster wrote:
Putting Sen. Warren (I love the sound of that) on the Senate Banking Committee makes perfect sense and should be done, if she wants the seat. We need to start getting people in the right positions in our government to start representing us, the people. The people need to regain their power.

Nov 08, 2012 11:42pm EST  --  Report as abuse
BiteRight wrote:
From now on, the Wall Street excesses shall be transformed into deficits. She can tame the sharks behaving like sleeping lions locked inside the cage.

Nov 09, 2012 5:37am EST  --  Report as abuse
breezinthru wrote:
Elizabeth Warren for President!

Nov 09, 2012 5:50am EST  --  Report as abuse
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