President Obama has formally announced his choice of Elizabeth Warren to oversee formation of a new Consumer Financial Protection Bureau, a key part of financial system reform approved by the U.S. Congress. Mr. Obama's selection of Warren enables him to emphasize measures taken by his administration and a Democratic-controlled Congress since the 2008 financial meltdown to protect Americans from abuses.
A fierce consumer advocate, Warren has for the past two years headed the committee created by Congress to oversee the $700 billion bank and financial institution rescue program known as TARP (Troubled Assets Relief Program).
The need to provide greater protections to Americans in the area of consumer financial products, such as mortgages and credit cards, was a key focus of majority Democrats in Congress after the financial meltdown of 2008.
With Warren, and Treasury Secretary Timothy Geithner by his side in the White House Rose Garden, the president said financial system abuses had cost American families tens of billions of dollars.
Mr. Obama said this is something Warren will help bring to an end.
"For years, financial companies have been able to spend millions of dollars on their own watchdog - lobbyists who look out for their interests and fight for their priorities," he said. "That is their right. But from now on, consumers will also have a powerful watchdog, a tough and independent watchdog whose job it is to stand up for their financial interests, for their families future."
Though she did not speak at the Rose Garden event, in comments on the official White House blog, Warren said the new bureau would "level the playing field" and work to repair "a gaping hole in the budgets of millions of families."
The new consumer protection bureau will be financed by the U.S. Federal Reserve, and have wide authority to enforce regulations, with Warren reporting to President Obama and Treasury Secretary Timothy Geithner.
Warren has been the object of sharp criticism from within the U.S. financial community, and in the U.S. Congress, for advocating a crack down on abusive lending and other practices, but has been widely praised by consumer protection groups for her positions.
By appointing her as an adviser, President Obama avoided a potentially bruising confirmation fight for Warren had she been formally nominated to head a new agency.
White House spokesman Robert Gibbs declined to say whether Warren could eventually be nominated to head the new bureau, saying only that she is focused now on bringing it into existence.
The target date for formally establishing the new consumer protection bureau in the Treasury Department is July, 2012.