A Fighting Chance

The president visibly relaxed. Then he flashed his ten-thousand-kilowatt smile and maneuvered me over to the seating area—two couches facing each other, with a couple of upright chairs at the end. He took one of the chairs and motioned for me to sit on the couch nearest him. Valerie sat on the other couch.

The president started telling a story about getting a car some years earlier. I didn’t catch the specifics, but he made fun of himself for not knowing all the details of the terms of the agreement he’d signed. And it seemed that even now, he was pretty irritated about how he had been treated. The story’s punch line: As great as the new agency was, the president was still worried about the auto-dealer carve-out in the law and the people who might get hurt.

I was a little surprised; I figured this was the moment for a well-deserved victory lap. The president had every reason to feel good about what he’d achieved—getting the agency signed into law was a big win for him. Instead, he was lamenting the part he couldn’t accomplish. I had to respect a man whose eyes were not on the political victory, but on the regular people whose lives would be touched by what he did.

Still, I knew what we’d been up against, and I knew that this agency was strong. “Mr. President, we got ninety-five percent of what we needed, and the agency will do a huge amount of good.” I told him I thought this was a really, truly genuine victory.

He laughed and then turned to the business at hand. He opened with: “This isn’t a job interview. You should head up the agency.”

I could feel the “but” coming and so wasn’t surprised when he said: But we have a real problem with the Republicans and the bankers. “You make them very nervous.”

The bankers didn’t want me, and since the Republicans now had forty-one seats in the Senate, they would likely filibuster my nomination so that I couldn’t be confirmed as director. And that was that. Nominating me to head the agency was off the table.

But the president didn’t talk about nominating anyone else, either. Instead, he suggested that I could serve in an unspecified interim position to help launch the agency, reporting to Secretary Geithner. But he didn’t offer specifics on what my duties would be and what I’d be able to do.

I was uneasy with his proposal. I didn’t know Secretary Geithner very well, and I figured he would do his best to set up a good agency. But he and I just didn’t see banking the same way. I was worried that the secretary would pull one way and I would pull the other, and the agency would get caught in some no-man’s-land in between, a sitting target for the big banks that still wanted to kill it.

The president and I went back and forth for a while but didn’t come to any agreement. We stood up, and after a perfunctory hug, I was back in the hallway.

What’s at Stake

Summer ended, and Bruce and I made our way home to Massachusetts for the start of classes. Amelia had another setback and returned to the hospital. In their continuing attempt to stop early labor, the doctors tried one medication after another. At one point, Amelia turned beet red from head to toe. As the days ticked by, the baby was still holding on, but just barely.

Meanwhile, the CFPB was just beginning to stir. A handful of employees inside the Department of the Treasury had begun to map out some of the agency’s early infrastructure. It was good, thoughtful work, but only the beginning. The real shape and scope of the agency remained anyone’s guess.

The struggle over who would launch the agency was at its core a debate about the agency’s future. Would the agency be relatively passive and soon sink below the radar screen, a hopeful idea that faded away? Or would it be a vigorous example of how government can work? This was a rare opportunity to build a new agency from the ground up, one that wouldn’t have a hidebound bureaucracy or an entrenched “serve the banks” culture. Those who launched the CFPB would have a chance to build a twenty-first-century watchdog—a watchdog that was lean and tough, knew exactly what its mission was, and used powerful new tools to make itself effective. But the agency couldn’t simply promise to be and do all these things. The agency had to deliver.

Deliver. That meant cracking down on the scams that target poor neighborhoods. Stopping the little tricks—bank fees that nibble $5 here and $20 there. Stopping the big tricks—mortgages that zoom from unbelievably low monthly payments to unbelievably high monthly payments. Making sure that families going through foreclosure are treated fairly and honestly. Making credit agreements simpler, so comparison shopping would be possible. The list was long.

One thing about the agency’s future was clear: It would be under attack from the get-go. The big banks had lost the fight over the CFPB, but they still had plenty of friends on Capitol Hill. If the agency was successful, it would put an end to tricks and traps that had produced some very fat profits. No one doubted that the big banks would try to cripple the agency if they could.