Stuff the President DIDN’T Say in the State of the Union

There are many tough choices coming up, and consumer protection may be the biggest.

By Kai Wright Jan 26, 2011

President Obama’s speech last night was resolutely positive and forward looking. It was, after all, [primarily a campaign speech](https://colorlines.com/archives/2011/01/the_state_of_our_union_is_weak_but_the_2012_campaign_begins_now.html) for which the take-home message was "win the future" through smart investment and innovation. If that sounds more roaring ’90s than wincing ’00s, that’s because it is. But there are a number of deeply consequential choices that must be made in the coming months, all of which the president noticeably avoided in his State of the Union. [Jamilah King wrote](https://colorlines.com/archives/2011/01/courts_may_decide_who_has_obamas_tech_sputnik_moment.html) about one of them earlier today: sorting out the FCC’s power to keep the Internet open enough to fuel the sort of innovation Obama cheered. And Julianne Hing will tomorrow dig into the dirty details of Obama’s Race to the Top education reform. Another one that’s crucial to racial justice is consumer protection. Obama has until July to name and get confirmed a permanent head to the new Consumer Financial Protection Bureau, which Congress created at the president’s urging during the financial reform fight last winter. Elizabeth Warren, the bureau’s lead proponent in Washington, is currently getting it set up as a functioning body inside the Fed. Banks want nothing more than to block her from becoming its chief. That’s because they know she’s the best chance for the bureau to work. Lobbyists succeeded in both keeping the new consumer watchdog housed inside the Fed and, importantly, giving existing banking regulators veto power over new rules the bureau writes. That means the only way it will actually have enough muscle to reign in predatory and deceptive banking practices–like, say, the subprime mortgages that existing regulators ignored for years–will be through a strong, informed chief who has the president’s ear. That’s Warren. Obama’s in a tough spot on this. It’s pretty clear the Senate will not confirm Warren at this point, thanks to the banking lobby. It’s also clear that, if Obama offers a "safe" (read: bank approved) stand-in for Warren, the new bureau will immediately lose credibility, and not just in the eyes of progressive critics. There’s every reason to believe Obama wants the bureau to succeed, and that he’s got faith in Warren to head it. He could cram her through by a recess appointment, or he could pick someone similar to her but who doesn’t have her high profile. Either way, it’ll take a fight, and a deeply consequential one. The new consumer watchdog is the only meaningful check on Wall Street’s power to continue the destructive practices that got us here. If Obama caves on its chief, he truly will have led us back to 1999.