Elizabeth Warren, the outspoken law professor who currently heads the government's TARP watchdog panel, will lead the creation of the new Consumer Financial Protection Bureau, President Obama announced Friday.
Warren -- who speculators have long suggested was the front-runner for the job -- made the announcement of her selection in a letter posted to the White House website.
"The new consumer bureau is based on a pretty simple idea: people ought to be able to read their credit card and mortgage contracts and know the deal," Warren wrote. "They shouldn't learn about an unfair rule or practice only when it bites them--way too late for them to do anything about it."
Her agency will help write standards on credit cards, mortgages and other consumer financial products.
Warren was officially named as an assistant to the president and special advisor to the secretary of the Treasury.
By giving her those positions, the White House has avoided a confirmation battle in the Senate. The law charges the Treasury Department with establishing the bureau. Eventually, the president would have to select a director who would be confirmed by the Senate, and President Obama said Warren would play a role in making that selection.
"Getting this agency off the ground will be an enormously important task, a task that can't wait, and that task is something I've asked Elizabeth to take on," President Obama said.
In announcing Warren's post to the press, President Obama did not take questions. Some members of Congress have accused President Obama of trying to bypass the confirmation process by giving Warren a position other than director.
White House Press Secretary Robert Gibbs said that "there's no circumventing of the law in an way" on Warren's appointment, since Treasury is tasked with establishing the bureau, and Warren is advising the department on how to do that. He emphasized that she is not the director of the agency.
"Nobody was going to be confirmed any time soon," Gibbs said. "What the president was focused on was 'how do you get this agency started?'"
Despite prodding from reporters, Gibbs refused to say whether the White House would consider nominating Warren for the actual director position, though he seemed to suggest Obama was unlikely to do so, since such a nomination would likely require her to stop her work at setting up the agency.
In naming Warren to the post, Obama said it "only makes sense" for Warren to lead its creation, since it was her idea in the first place. The creation of the bureau was included as part of this year's financial reform legislation.
Obama said Warren will have "direct access" to both him and Treasury Secretary Timothy Geithner, who leads a department that Warren frequently attacked during her time leading the Congressional Oversight Panel. She resigned that position Friday.
The bureau, President Obama said, "will empower all Americans with the clear and concise information they need to make the best choices - the best financial decisions - for them and their families."
He said that the bureau will take a watchdog role and spare Americans from confusion over financial products. Specifically, it will work on enforcing new rules on credit cards and bank overdraft fees.
Already, the Warren and Geithner will soon be joining forces. On Tuesday, the two will host a "Mortgage Disclosure Forum" at the Treasury Department that will allow stakeholders to give input on steps the bureau will take to simplify mortgage disclosure forms.
Under Warren, the Congressional Oversight Panel, which has published 24 reports and held 21 public hearings on various aspects of the Troubled Asset Relief Program.
In a statement, Warren expressed her gratitude for being placed on the oversight panel and thanked staff members for their work.
"During the course of its oversight work, the panel has closely monitored how TARP funds have been spent," Warren said. "We have analyzed and sometimes challenged key policy decisions, and we have worked hard to hold officials from both political parties accountable for their economic decisions. While the Panel has voiced many concerns with TARP and has made hundreds of specific recommendations, it also has concluded that TARP played a significant role in ending the panic created by the 2008 financial crisis and helping to stabilize the financial markets."
Under the rules of the panel, Senate Majority Leader Harry Reid -- a Democrat from Nevada who appointed Warren to her role on the oversight panel -- will be charged with naming her replacement.
Reid spokesman Jim Manley told BailoutSleuth he did not know who Reid intended to place on the panel or when an appointment would be announced.