Sept 2010 - Wall Street critic Elizabeth Warren will be a special adviser overseeing the creation of a new consumer protection bureau with vast powers to enforce regulations covering mortgages, credit cards and other financial products.

Warren, a 61-year-old Harvard University professor who describes herself as "not a Washington person," will be given the job of starting up the consumer bureau that was established in the financial regulatory bill Obama signed into law earlier this year. The new bureau will consolidate consumer protection duties now spread across various regulatory agencies.

She will report to both the president and Treasury Secretary Timothy Geithner.

In a post Friday on the White House blog, Warren said the bureau is based on a simple idea: that people should be able to read their credit card and mortgage contracts and "know the deal."

"They shouldn't learn about an unfair rule or practice only when it bites them, way too late for them to do anything about it," she wrote. "The new law creates a chance to put a tough cop on the beat and provide real accountability and oversight of the consumer credit market."

Because she is not being named the bureau's permanent director, Warren is not subject to Senate confirmation and can assume her duties immediately. Her frequent criticism of Wall Street and lack of support in the financial industry could have set the stage for contentious Senate hearings that may have derailed her nomination.

Warren designed the advisory role during long conversations with White House officials, a person familiar with her thinking said. Both sides were pleased with the arrangement, said the person, who insisted on anonymity to discuss private conversations.

Warren has spent the past two years running the Congressional Oversight Panel, charged with monitoring the Treasury Department's handling of the $700 billion bank rescue fund known as the Troubled Asset Relief Program.

The financial regulation law gives the Treasury Department the authority to run the consumer protection bureau while the nomination of its director is pending. Control must be transferred to the new bureau within a year, but the secretary has the latitude to seek an additional six months to complete the creation of the agency. That means Warren could perform her new duties into 2012.

Senate Banking Committee Chairman Chris Dodd, who has questioned whether Warren would have enough support to win confirmation, said Thursday the White House was within its rights to name Warren as an adviser and expert.

But he added on Bloomberg television, "We need a director. We've got to have someone who is confirmable. The law requires that there be a director of this bureau of consumer financial protection and that that nominee be confirmed by the Senate."

Asked whether Warren would effectively be serving in that capacity, Dodd replied: "You can't do that. You'll end up with too much opposition. ... I'd be totally opposed to someone on a backdoor operation here. We need to build consensus to this bureau."

Obama plans to eventually name a permanent director, though an announcement isn't thought to be imminent.

Associated Press writers Jim Kuhnhenn and Daniel Wagner contributed to this report