Elizabeth Warren is the woman who has become simultaneously a beacon of hope for consumers and a lightning rod for criticism, particularly from the banks and many legislators. Currently structuring the form the Consumer Financial Protection Bureau (CFPB) will take since President Barack Obama named her as its architect, with the title special advisor to the president, Warren has handled herself with strength, grace and dignity in hearings and in the press alike—if perhaps a bit too forthrightly for Washington’s taste.
That’s not to say that the Leo Gottlieb Professor of Law at Harvard Law School has received nothing but disparagement from political and financial leaders. On the contrary, no less a personage than Rep. Spencer Baucus, R-Ala., has praised her commitment to consumer protection.
Currently on leave from Harvard, where she taught contract law, bankruptcy and commercial law, Warren has been extremely busy not just negotiating the perilous ins and outs of Washington politics, which she acknowledges is not her strong point,but also setting ground rules for the new agency. While the jury’s still out on who will be its permanent head, there is no doubt Warren’s stamp will be on it through and through.
Born in Oklahoma, Warren grew up in a financially straitened household and attended college through the grace of a debating scholarship, eventually getting her J.D. from Rutgers University in 1976. After that, she moved around, with teaching stints in Texas, Michigan, and Pennsylvania before she joined Harvard in 1992 as the Robert Braucher Visiting Professor of Commercial Law.
She studied the bankruptcy system in the U.S., with her early work finding that people filing for bankruptcy really were very badly off financially and not, as had been popularly believed, simply attempting to evade payment of their debts. In her later studies she would identify bankruptcy’s three main causes: medical bills, divorce, and unemployment.
Over the years she became more advocate than analyst, spurred on not only by her research but by personal and/or family experience with financial hardship up to and including foreclosure. Her personal understanding of what it means to be up against it financially has led to her more active role in trying to educate and protect consumers.
According to a Newsweek bio, the catalyst seems to have been an appearance on the Dr. Phil Show after she co-wrote a book, The Two-Income Trap, with her daughter. She related hearing
the plight of a couple who had taken out a second mortgage on their house to consolidate debt. When Dr. Phil looked to her for advice, she said, "Dr. Phil, when a family is in financial trouble, putting a second mortgage on the house is about the worst possible move" because it opens the door for foreclosure down the road.
"Afterward," said Warren, "I thought, I've been doing scholarly work for more than 20 years, and I may have just done more good in the last 90 seconds than I ever accomplished with anything else I wrote. . . . I began to think that instead of writing one more thing to impress other academics or to reassure myself that I'm a serious scholar, I should [focus] on the question of change, of real impact, of how to be helpful."
And helpful she has been. At the behest of Sen. Harry Reid, D-Nev., she served on the Congressional Oversight Panel that looked at the bank bailout and financial reform (TARP). Reid may have gotten more than he bargained for, since instead of simply issuing reports Warren developed research projects that led to questions about how Treasury handled the banks during the bailout.
Her questions and reports were so forthright and so critical that they earned her, along with Sheila Bair, head of the FDIC, and Mary Schapiro, chair of the SEC, the title of Female Sheriffs of Wall Street from Time magazine (both Bair and Schapiro are also on the Top 50 Women list this year:
Then there is the CFPB, with its curtain still to rise. Already, however, she has appointed Holly Petraeus, wife of Gen. David Petraeus, to a position responsible for protecting military families from predatory lenders.
More undoubtedly lies ahead.
See the lead news article on the 2011 50 Top Women in Wealth.
See the article on the process for choosing the 2011 50 Top Women in Wealth.
See the 2010 50 Top Women in Wealth.