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.