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Elizabeth Warren Built the Consumer Financial Protection Bureau. It Became a Revolving Door.

When Sen. Elizabeth Warren (D-MA) began staffing up the Consumer Financial Protection Bureau in 2010 and 2011, she did something that appeared, at first blush, to be highly counterintuitive. 

Instead of limiting staff to those with extensive background in consumer activism and regulatory policy, she chose people with places like Deutsche Bank, Morgan Stanley, and Capital One on their CVs.

Those financial institutions were the very entities that the CFPB was supposed to haunt. The agency had been included in financial regulatory reform as a wishlist item for Wall Street-skeptical progressives. And yet, here was Warren—the intellectual godmother of the CFPB—handing out key roster assignments to officials from those very institutions. 

Before long, the supply chain was working the other way. As the CFPB carried out its mission during the Obama years, undertaking reforms to practices from aggressive debt collection to payday lending to mortgage finance rules, some of its senior staffers would leave the agency to work in the financial sector, many of them helping major banking and securities firms understand and navigate the rules they’d just helped write. As the agency pursued billions in civil penalties against financial firms, some of its senior officials found themselves on the payrolls of the sort of companies the CFPB was created to scrutinize and hold accountable.

It’s the sort of “revolving door” between government industry that Warren has decried as a progressive stalwart in the Senate and a leading candidate for the Democratic presidential nomination. And it could complicate her efforts to make the CFPB a cornerstone of her White House bid by drawing cries of hypocrisy from campaign rivals. 

But beyond the talking points, the hirings also offer an unexpected window into Warren’s approach to governance, suggesting that she’s a shrewder, more pragmatic policymaker than her persona as a populist firebrand indicates.