Consumer Candidate May Avoid a Vote

WASHINGTON — The Obama administration is considering appointing the legal scholar Elizabeth Warren to run a new consumer bureau on a temporary basis to avoid a potentially bruising confirmation battle in the Senate, according to people who have been briefed on the search.

The Consumer Financial Protection Bureau, a centerpiece of the Dodd-Frank Wall Street regulatory overhaul law that Mr. Obama signed in July, was established to prevent abusive, deceptive and fraudulent terms for mortgages, credit cards, payday loans and a vast array of other financial products. It is to be led by a director, appointed by the president to a five-year term with the consent of the Senate.

Two people who have been briefed on the appointment process, who spoke on condition of anonymity because they feared reprisal, said the White House was exploring ways to have Ms. Warren effectively run the bureau without having to endure a confirmation battle and, potentially, the threat of a Republican filibuster.

The law appears to permit Mr. Obama to name an acting director until a permanent director is named. Mr. Obama could also name Ms. Warren using a recess appointment, but such an appointment would last only until the end of next year.

In addition, the law would permit Ms. Warren to run the bureau’s day-to-day affairs while it is nominally under the supervision of the Treasury Department. The bureau, which will consolidate employees and functions from a host of other agencies, could have a budget as large as $500 million.

On Friday, Mr. Obama credited Ms. Warren, a Harvard law professor, with coming up with “the idea for this agency,” and he praised her as “a dear friend” and “a tremendous advocate.” He said he had had conversations with her but was not yet ready to make an official announcement.

Amy Brundage, a White House spokeswoman, declined Monday evening to discuss the possibility of a temporary appointment.

“Elizabeth Warren has been a stalwart voice for American consumers and families and she was the architect of the idea that became the Consumer Financial Protection Bureau,” Ms. Brundage said in a statement. “The president will have more to say about the agency and its mission soon.”

The Dodd-Frank law gave the Treasury secretary, Timothy F. Geithner, power to “perform the functions of the bureau” until a director is confirmed. The bureau will have vast powers to write and enforce new rules, and Treasury aides have already begun administrative work to get the bureau running.

Under the law, Mr. Geithner has until Sunday — 60 days from the signing of the act — to designate a date for transferring to the new bureau functions currently performed by the Federal Reserve, the Federal Trade Commission, the Federal Deposit Insurance Corporation and other agencies.

The transfer date is supposed to be anywhere between six and 18 months from July 21, when Mr. Obama signed the law.

But under the law, Mr. Geithner could delay that transfer until 24 months — or July 2012 — if he explained to Congress that “orderly implementation” of the law was “not feasible” within the 18-month limit.

Ms. Warren, 61, is widely admired by consumer groups and labor unions, while banks and other financial institutions have indicated that they would oppose her appointment. Senator Harry Reid, Democrat of Nevada and the majority leader, picked her to lead the panel overseeing the 2008 Wall Street bailout program.

An Oklahoma native, Ms. Warren is an authority on bankruptcy law and contracts. She taught at law schools in New Jersey, Michigan, Texas and Pennsylvania before joining Harvard in 1995.

Ms. Warren has been a front-runner to lead the new bureau, though a leading Democratic senator, Christopher J. Dodd of Connecticut, who is the chairman of the Banking Committee, has raised doubts about whether she could be confirmed. (Mr. Dodd has pledged to support Ms. Warren if she is nominated.)

A temporary appointment would permit Ms. Warren to shape the bureau from its inception, while avoiding the delays that could accompany a lengthy confirmation fight.

But some Democrats also say they believe the Obama administration might benefit from taking a prominent stance in support of Ms. Warren, and said the White House might relish a public battle rather than shy away from it.