Beverage’s reversal reflects a noticeable thaw in relations between Warren and parts of the banking industry. This week, Camden Fine, president and CEO of the influential Independent Community Bankers Association, told a gathering of 1,000 bankers that the odds Obama would nominate Warren were “better than even,” later remarking to American Banker that “you would have to look favorably on a [Warren] nomination because clearly she understands our model.” Frank Keating, the head of the American Bankers Association, told a reporter that the ABA would support Warren if she were confirmed as CFPB director by the Senate. And Robert Palmer, who heads the Community Bankers Association of Ohio, captured the mood of small banks when he told Bloomberg Businessweek that if Warren “leaves, and the direction changes, we’re not going to be very receptive.”
This is fascinating. It’s still not quite clear what’s going on here beyond getting the charming Warren in face to face to prove she doesn’t have horns and a forked tongue. Perhaps she’s getting coopted, though I doubt that.
I’d guess that she’s cleverly playing up a split between community bankers and the too-big-to-fail behemoths. The former aren’t much fans of the latter, and they ultimately have more leverage with politicians, since every congressperson has multiple bankers in his district, but the TBTF banks are concentrated in Chuck Schumer territory and Charlotte.
Thing is, Republicans still hate her. But resistance among them seems to be falling away somewhat as the banks’ does. It’s looking more like she’ll get the chance to run the bureau she founded.
I’d guess that she’s cleverly playing up a split between community bankers and the too-big-to-fail behemoths.
Yes, she's cleverly giving props to community bankers who by and large provide useful, comprehensible and reasonably-priced services to people in their communities while criticizing the bankers who systematically ripped off their customers, looted the treasury and crashed the economy. Machiavellian, that woman!
#1 Posted by Weldon Berger, CJR on Fri 6 May 2011 at 06:47 PM
The quote from you is 'sposed to be italicized. In any event, most local banks seem to have behaved pretty responsibly this time around and most giant banks didn't, so clever or not it's perfectly reasonable and indeed should be expected that she'll approach the two species differently.
#2 Posted by Weldon Berger, CJR on Fri 6 May 2011 at 07:16 PM
Yeah basically she's pointing out to the community bankers that the big banks are the ones who get the bailouts, the low interest fed loans, and the big paydays that follow when they encourage bad practices throughout the industry, eventually crashing it.
These big banks crash the economy, putting smaller competitors - who don't have the political allies TBTF banks do - out of business, which increases their market share. If Liz is telling them "I'm not going to let them encourage bad practices that crash the economy and hurt your business." then I don't blame them for listening.
Speaking of co-opted, there was an interesting article about another regulatory agency which has problems that hopefully Warren will have dealt with.
http://www.nytimes.com/2011/05/08/business/energy-environment/08nrc.html
"Critics have long painted the [nuclear regulatory] commission as well-intentioned but weak and compliant, and incapable of keeping close tabs on an industry to which it remains closely tied. The concerns have greater urgency because of the crisis at the Fukushima Daiichi plant in Japan, which many experts say they believe was caused as much by lax government oversight as by a natural disaster...
Congressional critics and even the agency’s own internal monitors say the N.R.C. is prone to dither when companies complain that its proposed actions would cost time or money. The promise of lucrative industry work after officials leave the commission probably doesn’t help, critics say, pointing to dozens over the years who have taken jobs with nuclear power companies and lobbying firms.
Now, as most of the country’s 104 aging reactors are applying for, and receiving, 20-year extensions from the N.R.C on their original 40-year licenses, reform advocates say a thorough review of the system is urgently needed.
The agency’s shortcomings are especially vexing because Congress created it in the mid-1970s to separate the government’s roles as safety regulator and promoter of nuclear energy — an inherent conflict that dogged its predecessor, the Atomic Energy Commission.
“It wasn’t much of a change,” said Peter A. Bradford, a former N.R.C. commissioner who now teaches at Vermont Law School. “The N.R.C. inherited the regulatory staff and adopted the rules and regulations of the A.E.C. intact.”...
But Mr. Mulley argued that the prospect of one day landing a lucrative position with a private company almost certainly played a role in softening the positions of some commission employees.
“The N.R.C. is like a prep school for many of these guys, because they know they’ve got a good shot at landing much higher-paying work with the people they’re supposed to be keeping in line,” Mr. Mulley said. “They’re not going to do anything to jeopardize that.”"
#3 Posted by Thimbles, CJR on Tue 10 May 2011 at 10:55 AM