Elizabeth Warren on the Senate Banking Committee? Yes!

Headshot of Elizabeth Warren

Former Harvard Law School professor, bankruptcy law expert and consumer advocate Elizabeth Warren helped start the Consumer Financial Protection Bureau.

And then Wall Street and Senate Republicans joined forces to prevent President Obama from naming her as its first director.

That may be a fight the banks and the GOP come to regret.

You see, Warren turned around and ran for the U.S. Senate, handily beating incumbent Republican Scott Brown of Massachusetts.

Now, Warren is set to take a seat on Senate Banking Committee when she takes office this month.

That's right, an intelligent, fierce consumer advocate who understands both the financial industry and the legislative world is going to have a great seat from which to carefully scrutinize the big banks.

And a woman besides!

CFPB by the numbers

Number Explanation
$536 million Amount three credit card issuers will pay for misleading consumers about products as a result of CFPB enforcement.
74,000 Number of complaints the bureau has received in 2012 regarding mortgages, credit cards and other consumer products.
1.4 million Number of consumers who have seen "remedial relief" based on actions against credit card, credit reporting and mortgage markets

Excuse me. I have to do my happy dance.

Warren is an expert in consumer protection and an advocate for fair, clear rules, when it comes to mortgages and credit cards.

She chaired the five-member congressional oversight panel that monitored the bank bailout, as well as consumer lending, foreclosure prevention, the automotive industry bailout and bank stress tests.

Warren was an early advocate for the Consumer Financial Protection Bureau, signed into law as the centerpiece of the big Wall Street reform law, the Dodd-Frank Act in 2010.

Republicans and financial industry executives weren't thrilled about Dodd-Frank, which was written in response to the financial crisis and attempts to rein in financial-industry excess.

They liked Warren even less.

She spent a year working to create the new bureau, and consumer advocacy groups wanted Obama to nominate her as its first permanent director. She lost that chance because the financial industry and the Republicans they funded thought she'd be too zealous a regulator.

From their point of view, they were probably right.

As second choices go, Warren's new job is pretty fine. Arguably, this gives her even more power than she would have had as head of the consumer bureau.

On the Senate Banking Committee, Warren can work to protect the bureau she started.

She'll also be able to push for implementation of the Dodd-Frank Act and work against revisions and attempts to repeal sections of the statute, all of which would weaken it.

Warren is also likely to support the Volcker rule, a section of the Dodd-Frank Act that would prevent banks from making speculative investments that don't benefit their clients.

The rule is named for Paul Volcker, who served as chairman of the Federal Reserve and is convinced that bank speculation helped cause the financial meltdown.

The Volcker rule would prevent big investment banks from using their own money to trade stocks and derivatives. It would also sharply limit banks' ability to own or invest in hedge funds or private equity funds, and would limit the amount of liability that the biggest financial institutions can hold.

The same big investment banks would like it very much if the Volcker rule went away. Trading the house's money, as well as investing in or owning hedge funds or private equity funds, are great ways to make a lot of money — when they don't crash and burn.

Some lawmakers aren't familiar with the financial world, a Byzantine place with its own customs, populated by natives who are mostly men, talking loudly and moving fast. Those same lawmakers may feel intimidated by that world and its inhabitants.

"Intimidated" isn't the word that comes to mind as I look at Warren's professional life. She clearly understands both the new legislation and the world it affects, and her history suggests that she won't be shy about using her new committee power to push for rules that she thinks will benefit American consumers.

In the end, Wall Street and the Republicans may wish that they'd just let her have the first job she wanted.