'You make them nervous': Why Obama told Elizabeth Warren she wouldn't lead consumer watchdog agency

ABC News
Power PlayersApril 21, 2014

Power Players

It felt like a green version of hell.

That’s how Elizabeth Warren described a meeting with President Obama in 2011 when she learned that she would not be tapped to lead the newly created consumer watchdog agency that she had pioneered. It was a hot day, and the president wanted to have the meeting outside.

“It was these tall, tall hedges, so there was no air,” Sen. Warren told ABC News’ David Muir in a sit-down interview. “The president said, ‘Isn't this great?’ And I thought, ‘God, you gotta be kidding me.’”

In her new memoir, “A Fighting Chance,” Warren writes about her life’s journey – from the time she first confronted economic hardship as a child growing up in Oklahoma, to becoming a Harvard law professor and renowned consumer advocate in the wake of the 2008 financial crisis, to her current role representing Massachusetts as a U.S. senator.

"You make them nervous,” Warren recalled Obama telling her during their meeting.

Facing strong Republican opposition on Capitol Hill, Warren’s confirmation process as the first director of the Consumer Financial Protection Bureau would have almost certainly failed. Obama instead nominated Richard Cordray to lead the new oversight agency, and he was successfully confirmed.

“The big banks had said from the very beginning they would kill this agency and … they didn't want me to lead it,” Warren said. “And their Republican friends in the United States Senate had made it clear that they were not gonna confirm me.”

Warren writes in the book that Larry Summers, a top economic adviser to Obama at the time, told her she would have to decide: did she want to be an outsider or an insider?

"Outsiders can make a lot of noise, but insiders are not going to listen,” Warren recalled Summers as having said. “Insiders have a chance to influence what's happening, but there is a cardinal rule: Insiders never criticize other insiders.”

And though Warren has since gone on to become a senator, she resists the notion that she has become an insider because of it. “I came to this too late to be an insider,” Warren said.

When she took her seat in the Senate Banking Committee for the first time in February of 2013, Warren showed no sign of putting down her outsider ways, and instead took to task a group of regulators set to testify.

“Tell me a little bit about the last few times you’ve taken the biggest financial institutions on Wall Street all the way to trial?" Warren asked the regulators during the hearing -- a question Warren said was answered with silence.

“They go after, you know, the little folks,” Warren said. “Somebody who gets caught with a couple of ounces of marijuana, boy, you better believe there's someone there to go after them. But these huge financial institutions that launder drug money, financial institutions that have broken our sanctions with Iran … there's no enthusiasm, no appetite to take those guys to trial, to say, ‘You're responsible, you're the one who did this, and you have to be accountable to the American people.’”

“Boy, you want to talk about a tilted playing field? There it is,” she added.

Warren also reflected on her own life and the financial struggles her family faced after her father had a heart attack that took him out of work for an extended period of time as he recovered.

“I learned when I was 12 and my daddy had that heart attack that good people can get smacked in the head economically, and their whole lives can be turned upside down,” she said. “After my daddy had a heart attack, that's when I grew up.”

While Warren’s family was eventually able to get back on their feet economically, Warren said she is worried that the same opportunity is not available to most Americans today.

“Today, families are tangled, they are tangled in debt,” she said. “The kids have to pay incredible prices to go to college and take on student loan debts that crush them. We're not building those same opportunities, those same second chances for families, for our kids that we built a generation ago. And if we don't make some changes, it's gonna fundamentally change this country.”

Despite suggestions that she could present a formidable challenge to former Secretary of State Hillary Clinton, who has yet to announce whether she will run for president in 2016, Warren said she is not considering a bid for the White House.

“I’m not running for president,” she said.

Warren was one of 16 Democratic female senators who signed a secret letter to Clinton last year urging her to run. When asked if the former secretary of state would be a good president, Warren said Clinton is "terrific."

For more of the interview with Warren, including her defense of her controversial comments that no one gets rich on their own, check out this episode of “Power Players.”

ABC News’ Richard Coolidge, Jordyn Phelps, Christine Romo, Polson Kanneth, Alexandra Dukakis, and Arlette Saenz contributed to this episode.

Gary Westphalen, Tom Manning, and Mark Suse assisted in production.