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Warren Heading to Seat on Senate Banking Committee

Joseph McCafferty | December 5, 2012

Wall Street gadfly turned Massachusetts Senator-elect, Elizabeth Warren, will reportedly take a seat on the Senate Banking Committee after she is sworn into office in January, according to reports by Bloomberg and the Boston Globe.

While the news was leaked by Democratic aides, Warren has been considered as a likely candidate for a Banking Committee seat ever since she defeated Senator Scott Brown in November. The former Harvard Law professor was a main architect of the Consumer Financial Protection Bureau, a consumer watchdog for the financial industry that was part of the Dodd-Frank Act, and helped get the agency off the ground as an adviser to the Obama Administration.

Her appointment is unlikely to go over well on Wall Street. Warren made financial reform the centerpiece of her campaign and frequently railed against the financial sector on the campaign trail. “Wall Street CEOs—the same ones who wrecked our economy and destroyed millions of jobs—still strut around Congress, no shame, demanding favors, and acting like we should thank them,” she said during a speech at the Democratic National Convention in September.

As a member of the Senate Banking Committee, Warren will have a powerful hand in shaping Wall Street regulation, including the remaining provisions of the Dodd-Frank Act, such as the hotly contested Volcker Rule, which places limits on proprietary trading by commercial banks.  She is expected to play an oversight role, watching over the Securities and Exchange Commission and to fight any efforts to chip away at the Dodd-Frank Act.

In many ways her appointment will serve as a reminder to Senate Republicans and Wall Street lobbyists to “be careful what you wish for.” She decided to run for Senate only after President Obama declined to nominate her for director of the CFPB, only after Senate Republicans signaled fierce opposition to her appointment, based in part on intense lobbying by the financial sector. (Obama ended up naming Richard Cordray to head the Bureau with a controversial recess appointment.) As a member of the Banking Committee, she will hold far more influence on banking regulation that she would have as the director of the CFPB. Now those same critics may be forced to reach out to Warren.

Senator Joe Manchin (D-W.Va.) is also expected to gain a seat on the Banking Committee, according to the reports.