After a Victory in the Fed Race, Elizabeth Warren Sets Her Sights on New Opponents

        As many readers may be aware, Larry Summers, whom I mentioned last week as President Obama's leading choice to head the Federal Reserve, dropped out of the running mere hours after I posted that his candidacy was looking shaky.  With many members of the Senate Banking Committee already opposing his nomination, he had attempted to seek out support from Elizabeth Warren.  She did not directly oppose him until after he had dropped out of the race, at which point she conceded: "Well, I don’t think it’s any secret that Larry was not my first choice (Politico)."  As someone who follows Senator Warren knows, she likes to play it very close to the vest.  So it is no surprise that she was reluctant to make a statement like this until after Summers was officially out of the running.  Now however, she has thrown her support behind Janet Yellen; the new front runner for the position.  Warren's opposition to Summers was unsurprising, given his consistent support for deregulatory policies including the repeal of the Glass-Steagall Act which Warren has been fighting tirelessly to bring back.  It is important to note however, that Yellen and Summers both served in the Clinton administration and perused many of the same goals, including support for the repeal of Glass-Steagall and the implementation of new policies which were designed to lower Social Security payments to senior citizens (Huffington Post).

        In another corner of the financial ring, Warren posed a challenge to the Department of Education and the Treasury. In a letter outlining a Congressional probe into the business practices of Sallie Mae, one of the largest student loan servicers in the country, Warren cited numerous violations of federal rules and regulations as well as the government's apparent inability to hold them accountable, saying:

"While the government has been quite tolerant of Sallie Mae's failings and helped Sallie Mae maintain its profitability, it is not nearly as generous when it comes to student borrowers. For students who default on their federal loans, the accountability is relentless. The government bars these borrowers from participating in federal student aid programs. The entire loan balance becomes due immediately, and fees and penalties get stacked on top (Scribd)."

        This is not her first time chiding what she sees as major failings in the federal government's regulation of student loans.  A bill which she sponsored, the Bank on Student Loan Fairness Act, would have lowered the interest rate on student loans to the same level paid by banks when they borrow money from the government. Sallie Mae has gotten loans from the government at 0.82% while the current interest rate for student loans is 3.86% (Washington Post). Warren's bill is currently stuck in committee and will likely stay there indefinitely.

        Warren also spoke this week about the new FEMA flood zone maps created in the wake of Hurricane Sandy.  These new maps put tens of thousands of buildings in New York and New Jersey into the flood zone.  This would require homeowners to either get extensive renovation done to their homes in order to meet the safety code or pay up to $20,000 in annual insurance premiums (NBC).  Always the defender of the middle class and consumer rights, Warren is pushing FEMA to delay the implementation of these new requirements by a year in order to asses the maps and ensure a smooth transition. She cited many people who have already had to give up their homes due to their inability to pay for either the renovations or the alternative insurance premiums.

        Finally, the relentless consumer protection advocate threw her hat into the battle over GMOs, and, surprisingly, has been challenged by those on the left who say that she doesn't call for strict enough guidelines.  In a letter to the FDA coauthored by Mark Udall (D-CO) calling for labeling guidelines for products which contain GMOs, she said:

"...labeling guidelines and regulations will benefit producers wishing to label their products based on consumer demand for these labels.  For consumers, market-driven labeling ensures that the information they demand about the food being sold on grocery store shelves is clear and accurate, without the confusion of dozens of different standards or labels. (Senate.gov) "

        The main criticisms with Warrens request is that it would make labeling of food containing GMOs optional (Politico).  The assumption being that conscious consumerism on the part of the American public would drive companies to voluntarily label their products.  The concern from critics of this letter being the decidedly low levels of conscious consumerism practiced by Americans.