Elizabeth Warren has just one plan

A detailed look at Warren’s successes and failures at the start of the CFPB — and what they tell us about how she might govern.

Sen. Elizabeth Warren’s unofficial campaign slogan is “she’s got a plan for that.” The reality is, she has just one.

She wants to finish what she started when she first came to Washington. And she will bring with her a cadre of energetic, ideologically committed regulators who will go after the bad guys of corporate America who she believes have crippled the national economy.

If Warren wins the presidency, she, like any Democrat, will face steep odds of getting an ambitious legislative agenda through Congress. The real action in any administration is executive in nature: knowing what regulatory buttons to push, which enforcers can really go for blood, who to put where, and how to manage them.

It’s a job Warren’s done before, when she was charged with building the Consumer Financial Protection Bureau from scratch. It’s an agency she initially proposed in an article as a law professor more than a decade ago and it has a singular mandate: to stand up for everyday Americans against the financial industry and the banks.

“She did an effective job starting up that organization by almost any measure,” said Jake Siewert, a former senior adviser in the Obama Treasury Department. “Even the people who hate the CFPB think it’s too effective.”

And he would know, since high on the list of reasons Warren didn’t end up getting nominated to run the CFPB permanently was her repeated clashes with Siewert’s then-boss, Treasury Secretary Timothy Geithner.

Warren saw Geithner and other key members of Obama’s team such as National Economic Council Director Larry Summers (and by extension Obama himself) as too soft on Wall Street and too compromised by ties to the business world. These days, Siewert runs global corporate communications for Goldman Sachs, Geithner is president of the investment bank Warburg Pincus, and Summers has moonlighted as an adviser to Citigroup and D.E. Shaw while teaching at Harvard and taking shots at Warren’s wealth tax.

I spoke with 30 current and former government officials and employees, lobbyists, industry insiders, consumer advocates, and members of Warren’s inner circle to understand who Warren really is, not only as a policymaker but also as an executive, a decisionmaker, and a leader. Her supporters and detractors describe her as ruthlessly committed to her ideals — and ruthlessly effective at making them real.

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In the midst of her fight for the agency to be written into law, Warren said she would do it even if it meant “blood and teeth left on the floor.” It more or less did.

Over the course of 10 months — from September 2010 to July 2011 — Warren staffed the bureau with academics, policy wonks, and industry insiders, and while she had a clear vision for the agency, she also valued data and empirical evidence. She was a lightning rod atop a lightning rod, and she knew it.

Seth Frotman, who would later go on to lead the bureau’s student loans office, recalled her message: “You are all critical to cleaning up the abuses that have laid holy hell on American families. I expect all of you to do your job to the fullest, and when you do that, I will have your back.”

Warren has cultivated a reputation as a smart, detail-oriented policymaker, and on the 2020 campaign trail she’s rolled out a litany of policy blueprints, attracting many of the same admirers and detractors on that score. But her time at the CFPB reveals a fundamentally more ideological, confrontational figure who did not come to Washington to make friends. The federal government had, in her eyes, let big business run wild for decades, and that had wreaked havoc on everyday Americans. Wall Street had just gotten away with murder, and she wasn’t going to let that happen again — even if that meant alienating powerful members of the party establishment.

“It would have been so easy for her to pull a few punches … but she didn’t, she just eviscerated Geithner, as she often did,” said Neil Barofsky, the former inspector general of the bank bailout program and author of Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street, as he recalled watching an especially contentious hearing with Geithner in the lead-up to the CFPB’s launch. “I remember in that moment thinking, ‘She’s nuts, everything is set up for her.’

“Like any other bully, you’ve got to stand up and punch that bully in the nose,” Barofsky said. “And she wasn’t afraid to punch the bully in the nose.”

Warren’s presidential campaign declined to comment on the record for this story.

Warren the true believer

Warren didn’t plan to wind up in politics. The system — or, rather, the broken nature of it — drew her in. She spent years studying bankruptcy and observed first-hand how backroom deals between industry executives and lawmakers made it easier for one financial setback to shatter people’s lives. When the financial crisis hit, the government stepped in to help the banks that had caused it instead of helping the millions of Americans who had been harmed. It didn’t even bother to find out where the billions of dollars it gave to Goldman Sachs and JPMorgan were going.

In her eyes, Wall Street had failed, and the American political establishment — Democrats and Republicans alike — had failed with it. She’s running for the White House now because in her eyes, it is still failing.

“Corruption has put our planet at risk. Corruption has broken our economy. And corruption is breaking our democracy,” Warren told a crowd of some 20,000 supporters under the arch of New York City’s Washington Square Park in September. “I know what’s broken, I’ve got a plan to fix it, and that’s why I’m running for president of the United States.”

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On the 2020 trail, Warren’s laundry list of plans, ranging from overhauling American capitalism to canceling most student loan debt, has become a central feature of her campaign. “Warren has a plan for that” is her campaign tagline. But the reality is, today’s presidents are lucky to get one major piece of legislation: Obama had the Affordable Care Act, Trump has the tax cuts. Warren says if she lands in the White House, she’s going to prioritize rooting out the corruption she so deeply abhors.

“She is laser-fucking-focused on what is happening to working families who need help,” said one former CFPB staffer. Perhaps too laser-focused to end up running the agency she created — she sometimes didn’t see the political attacks coming until it was too late.

A president’s most potent capabilities lie in leveraging the bully pulpit, pulling administrative levers, and tapping executive regulators and enforcers. These are skills at which Warren is adept, and that could make her especially effective as president. Warren projects a moral clarity rivaling that of Sen. Bernie Sanders, and she has the know-how to try to implement her vision. From the Oval Office, she could reshape the Democratic Party from the inside out. Maybe even in ways the party is not ready for.

“How many other candidates have this proven record of actual execution and leadership and management?” said Elizabeth Vale, a longtime adviser to Warren.

While she’s previously played the good soldier and pushed others to advance her agenda, she appears to have determined that if she wants this done right she has to do it herself.

“I don’t think she’s willing to wait anymore,” one Warren ally said. “She has learned that it is better to take whatever power and resources you have and use them all at once because you’re never going to get another shot.”

Starting from scratch

President Obama took office in the midst of a global financial crisis that threatened to eclipse the Great Depression. Years of lax enforcement that allowed banks to load up on enormous amounts of risk had plunged the economy into a spiral. Obama needed to assuage the fears and outrage of the American public, and to assure them it wouldn’t happen again. Warren’s idea for a consumer protection agency, first proposed a few years prior, appeared to fit the bill. It was a pillar of the Dodd-Frank financial reform he signed into law in July 2010.

Warren seemed like the obvious choice to run the bureau and become its permanent director, but the decision would have posed risks for Obama. It wasn’t a given that Warren would be effective in standing up the CFPB. She had spent her career in academia and in oversight, where her main jobs were to conduct research and ask questions. Her skillset might not have translated into being an executive running an organization.

The people she recruited in the early days of the CFPB still have a tendency to refer to her as “professor,” not “senator.” She ran meetings like a law school class: She called on people, and she made fun of them if they were late. (To be sure, it wasn’t all work. Warren on at least one occasion snuck her dog into the office to play.)

She was the single most powerful force in putting the agency on the table in the first place, and she wanted to prove it was worth it — even though it wasn’t clear how long her time there would last.

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But the bigger risk for the president was a political one. Warren had previously been the head of a congressional panel overseeing the Troubled Asset Relief Program (TARP), a $700 billion bank bailout, and in that role she had made some enemies, including within his own administration. Obama’s economic advisers seemed to care more about the banking industry than struggling families in the wake of the crisis, she believed, and she let them know it. From her perch on the oversight panel, she released scathing reports on the bailouts.

“She ruffled a lot of feathers in kind of getting a little bit beyond her mandate, some would say, and suggesting a little more forcefully than what was expected from that panel in policy proposals,” said one former Senate Banking Committee aide.

Politico’s Alex Thompson recently quoted a litany of former Obama administration officials describing Warren as a “professional critic,” “sanctimonious,” and a “condescending narcissist.” Most of the Obama officials, Republican lawmakers, and bank lobbyists I reached out to declined to speak with me, much less on the record. Representatives for Obama and Geithner declined to comment.

After back-and-forth with the White House and a pair of meetings with the president, Warren agreed to help set up the agency. Her ultimate goal was to be nominated as its director, which, of course, did not come to pass. She kept her hopes up anyway, and she hit the ground running.

When Warren arrived at the bureau in September 2010, it had a handful of employees and was housed temporarily in the Treasury Department’s basement.

“We set a quite aggressive goal to stand up the place in a year and be open for business, and if I had known at the outset what I came to learn over the next couple of years, I probably would have set a less aggressive target, but God damn it, we were going to hit that target,” said Raj Date, who served as Warren’s deputy director at the CFPB.

One of the first orders of business was hiring staff, and she wanted people who believed in the mission. She wanted to bring in true believers.

“I don’t really think, in retrospect, it was a real job interview,” one former official said, recalling that Warren, besides typical job interview banter, talked to him about the architectural plans, including a museum and child care facilities, for the CFPB’s new building. “I think they had basically decided that they were recruiting people and were going to hire them, and then they used the meeting with Elizabeth Warren to basically make it so you couldn’t say no.”

People from the financial industry weren’t necessarily barred from getting a job at the CFPB, but they had to have gotten religion on consumer finance. Date, for example, had previously worked at Deutsche Bank and McKinsey. Catherine West, its first chief operating officer, had worked at Capital One.

Warren’s team was especially wary of longtime government employees, with one former official saying they viewed some of the workers they had inherited from other agencies as “dead weight.” The non-true believers sometimes wound up with fewer responsibilities in their portfolios than they might have imagined.

“There was this old Washington versus 21st century agency culture clash,” said former CFPB official Leandra English, who would go on to battle one of the agency’s fiercest critics for control of the agency years later.

Warren built the plane while it was flying

Warren faced an immense challenge in launching the CFPB. On the positive end, she was starting from scratch. On the negative end, she was starting from scratch.

She and her team were trying to build a new kind of agency that would really be there to help people. When Americans were misled by their mortgage lenders, tricked into signing on to agreements they didn’t understand, or confused by banks’ jargon, the bureau would be a place for them to turn for help. It was there to make sure payday lenders, credit card companies, and mortgage firms weren’t taking advantage of people anymore — and to prove to the public that the government could work for them.

Even though the CFPB was barely existent when Warren arrived, it still had work to do, and a lot of it. One of her primary agenda items was devising a meaningful system for consumers to file complaints. There were certain rules, regulations, and forms that, by law, the CFPB had to get out the door. She had to figure out whether the bureau would have several regional offices, like other bank regulators, or run everything out of the headquarters. She landed in the middle: There would be four offices.

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Warren also paused to take care of the details and make sure the work was consumer-facing. She insisted the CFPB have a logo, not a seal, so that it was friendlier to the public. One former staffer recalled Warren looking at an early draft of a loan form and asking, “Could you please make this simpler?”

She was building the plane while it was flying.

“The CFPB felt like a startup company, a merger, a bureaucracy, and a political campaign all in one,” said Deepak Gupta, who served as an appellate litigator under Warren at the bureau.

As the agency grew, even something as mundane as finding meeting space or getting basic office necessities became a challenging task. Warren had to hold all-staff meetings in the elevator bay. One former staffer recalled being asked on her first day whether she wanted a normal desk or a standing desk. When she opted for a standing desk, the person setting her up said, “Great, because we don’t have enough chairs.”

Through it all, Warren’s efforts were successful; the inspector general, which put out a report on the setup of the bureau, largely approved of her work.

Warren’s critics zeroed in on her as a fanatic

While Warren was running a tight ship inside the bureau, outside the storm was brewing around her. Republicans, bankers, and industry groups lambasted the CFPB during its formation as an egregious example of government overreach. In an appearance on The Daily Show in April 2011, host Jon Stewart joked that she had been turned into Che Guevara.

“Bank lobbyists were coming off of a period when they just got completely rolled. They got Dodd-Frank shoved down their throats, and Elizabeth Warren was one of the reasons for that,” said Carter Dougherty, now the communications director for Americans for Financial Reform, a consumer advocacy group founded after the financial crisis. They weren’t going to forget it.

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Warren undertook a charm offensive and began selling the bureau to the public and its detractors.

Cam Fine, then the head of the Independent Community Bankers of America, a trade group for small banks, recalled her original pitch for the agency. “If there was a dedicated bureau that oversaw the regulation of all banks, that bureau would be more focused on Wall Street and level the playing field between community banks and Wall Street banks, megabanks.”

She wanted to make clear that, from her perspective, the Citibanks and Bank of Americas of the world were the real ones with a target on their backs, not the smaller institutions.

Warren met with community bankers and credit unions in all 50 states. She spoke at a dinner hosted by the Financial Services Roundtable, a bank lobbying group, and at Fine’s group’s national convention. “I know she picked up the phone and talked with the CEOs of the very largest banks — when they would accept her calls,” Fine said.

But it wasn’t just banks that were skeptical of her. Other bank regulators bristled at the CFPB’s arrival, and agencies engaged in turf wars over responsibilities. In the fall of 2010, Treasury officials appeared to leak details about what color Warren was painting her office, apparently trying to cast her as high maintenance.

In May 2011, 44 Republican senators sent a letter to Obama making it clear they would not confirm any nominee to become the CFPB’s director — the subtext being, especially not Elizabeth Warren.

Former Rep. Barney Frank says that despite all the pushback, he urged Obama to nominate Warren for the CFPB anyway. “I said, ‘Well, here’s the deal, if you appoint her and she’s confirmed, she’ll run the agency. And if you appoint her and they reject her, she’ll get elected to the Senate.’ And he said, ‘Oh, you think she wants to run for the Senate?’” Frank recalled. “And I said — I must say, somewhat presciently — ‘Well, I think she wants your job, but she has to start somewhere.’”

Despite the chaos on the outside, Warren encouraged employees to keep their heads down and do their work. Many of the employees I spoke with said it didn’t affect their day-to-day, but some conceded Republicans’ desire to kill the agency made recruiting hard. People considering jumping to the CFPB weren’t sure if it would even exist in few years. Budget decisions could be weaponized by the agency’s critics.

“Elizabeth Warren being a political lightning rod meant that there was a sort of mistrust about the intent of the agency,” one former CFPB official said.

As time passed, Warren’s vision of getting nominated as the CFPB’s permanent head faded. Dodd-Frank had been signed into law a year ago and Obama still hadn’t landed on a director. He wasn’t going to go to the mat for Warren, who had become an increasingly divisive figure.

The line the Obama administration and Democratic leaders employed publicly was that Senate Republicans were never going to confirm her, and they thought she should run for the Senate in Massachusetts instead. Obama’s advisers made the pitch to the professor, and Sens. Harry Reid and Chuck Schumer nudged her as well.

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Her dream of running the agency she had conceived was dead, and it was a man, Richard Cordray, who Obama announced as his pick to lead it instead in July 2011. In some ways, it was a pick designed to placate Warren; she had recruited Cordray, the former attorney general of Ohio, to head the CFPB’s enforcement office, and she was the one who delivered the news that Obama wanted to nominate him. She stood next to both men in the White House Rose Garden during the announcement. She was disillusioned, but she was careful not to betray her disappointment.

Warren left the bureau and went back to Massachusetts, pausing to go to Legoland with her grandchildren and leaving Date in place as interim director until Cordray was confirmed. Except he wasn’t. It turned out Senate Republicans were serious about not confirming anyone, so Cordray was eventually appointed during recess. (Who should be in charge of the agency remains a matter of dispute, one currently sitting before the Supreme Court.)

“Everybody assumed at the time [the refusal to confirm a director] was directed against her,” Cordray said. “As it turned out, the same blockade continued to operate against me, so maybe that wasn’t the right assumption.”

Back in Massachusetts, Warren started a “listening tour,” ran for Senate there, and won.

Warren has kept up her fight in the Senate

Anyone who thought the Senate would be a safer place to keep Elizabeth Warren was badly mistaken.

“From a Wall Street perspective, there was a period where the scariest letter you could get was from Sen. Dick Durbin’s office,” said Isaac Boltansky, an analyst at policy research group Compass Point LLC. “That changed the minute Senator Warren unpacked her first box.”

Warren decided to use her new platform to fight back against the banks and Wall Street executives she distrusted. Her time at the CFPB has given her a unique understanding of which executive agency levers can and can’t be pulled, and it shows. Through letters, hearings, and advocacy, she’s pushed agencies to make real changes on student loans and student debt, for example, and she weighs in on federal rulemaking, even if it seems obscure or what she’s getting at isn’t immediately clear.

“She’s done so many things that seem random but that have totally changed the game, because she knows about the administrative toolkit,” one former CFPB official told me.

From her seat in the Senate, Warren has directed her ire at institutions such as Equifax and Navient. Her public grilling of former Wells Fargo CEO John Stumpf is the stuff of legends. “You should resign … and you should be criminally investigated,” she told him at one congressional hearing. On the campaign trail, Warren has called for breaking up big tech companies and jailing corporate CEOs, and she has proposed a sweeping anti-corruption bill as her first priority. But it’s not just the big guns she’s going after.

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In 2016, Leonard Chanin, then head of the financial services practice group at law firm Morrison & Foerster, appeared before the Senate Banking Committee for a hearing on the effects of consumer finance regulations. Warren is on the committee, and the two had met before: Chanin was one of the government employees transferred to the CFPB under Warren in the wake of Dodd-Frank. He was previously at the Federal Reserve Board’s division of consumer affairs.

Warren assailed Chanin in her questioning.

“I was told that even though you played a key role in blowing up the economy that I needed to hire you because you were one of the few people with the technical expertise needed to write the Dodd-Frank rules,” she said. When she brought him on, he claimed that he had learned from his failure, she continued, but now she could see that wasn’t the case. “Of all the people who might be called on to advise Congress about how to weigh the costs and benefits of consumer regulations, I am surprised that my Republican colleagues would choose a witness who might have one of the worst track records in history on this issue.”

Warren’s performance raised some eyebrows. Sure, it was bad that Chanin had left the consumer bureau to represent business interests, but did he really deserve this?

“It’s one of her strengths, and it could also potentially be one of the things she struggles with, that fiery temperament where she insists on justice is one of those things that gets people excited about her and that makes vested, powerful interests nervous,” said Christopher Peterson, who landed at the CFPB’s office of enforcement soon after Warren left the agency.

A source familiar with Warren’s thinking said that she was concerned that Chanin was becoming a tool for Republicans to criticize the CFPB and try to unravel it. She wanted to use the hearing to make sure the American people knew he had failed to be on the side of consumers before and after the crash.

In other words, she wanted to make him toxic.

“She is 100 percent inspired by her frustrations,” said one former CFPB official.

Warren knows how the system works — and she’ll use that

Warren’s ruthlessness in her dealings with those she believes have done wrong — and her refusal to back down — has propelled her political career. It turned her into a populist icon in the wake of the financial crisis. It ignited a movement to push her to run for president in 2016. It made, “Nevertheless, she persisted,” a rallying cry. Consumer protection was, in a lot of ways, her first political campaign in selling an idea to the public. The outreach to Democratic insiders she’s reportedly doing at the moment, she’s done that before, but with banks.

The competent, folksy progressive grandmother persona Warren now employs on the campaign trail makes it easy to forget a lot of how she landed on the national stage in the first place. Sure, she’s got a plan for trade and foreign policy and immigration and energy and farms. But it all boils down to one central scheme: Get in there, bring a bunch of true believers with her, and overhaul from within the corrupt system she loathes. Obama acolytes need not apply — well, most of them.

“She is a very intelligent person who has very strong ideas about public policy and a great sense that there is unfairness in this society that needs to be corrected,” Frank said.

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Among most people close to her, Warren inspires a level of loyalty that is almost jarring. They describe her as incredibly warm, unquestionably visionary, data-driven, and whip-smart. Hyper-principled, they say, but not hyper-partisan. The resentment among those who oppose her is equally potent.

One former CFPB official wondered whether Warren had over-learned a lesson at the CFPB and become too attuned to politics. It’s not that the mission isn’t there, it’s that it’s so layered with plans that it’s harder to see. “I didn’t quit my job to join her because of her plans,” the official said. “I knew she had them, but this is someone I thought wanted to do the right thing. And I think that’s what she’s got to get back.”

Had Elizabeth Warren come to heel and played the inside game after the financial crisis, she would have been CFPB director and would now be a private citizen, maybe even writing that book on generational theft she once confessed she wanted to write. There would be no Senator Warren, let alone the prospect of a potential President Warren on the horizon.

One person who worked with Warren on the bank bailout oversight committee put it succinctly: “Elizabeth took the only path that Elizabeth was going to take, and she’s continued to take that kind of path. She’s not a go along to get along type of person.”