07/22/2010 04:17 pm ET Updated May 25, 2011

ABC: Bank Lobbying Group Says Consumer Bureau Must See Banks' "Side of Issues, Not Just Consumers'"

In a very solid piece about what the fight over Harvard Professor Elizabeth Warren and the new Consumer Financial Protection Bureau (CFBP) is really about, ABC News includes this revealing snippet from the Financial Services Roundtable, one of the most powerful corporate front groups in Washington:

The financial industry, for its part, would like Obama to pick someone more likely to see their side of the issue, not just the consumers' side.

"We believe the Consumer Financial Protection Bureau should focus on both ends of the transaction," said Scott Talbott, chief lobbyist for the Financial Services Roundtable in Washington.

Not to put too fine a point on it, but the new agency is called the Consumer Financial Protection Bureau, it is not called the Bank Financial Protection Bureau (as, frankly, you might call the rest of the government). Indeed, the new agency's whole mission is to protect consumers, meaning it shouldn't "focus on both ends of the transaction." It should see issues exclusively through the prism of consumers. That's its very r'aison d'etre.

The fact that the banking industry, after winning so many concessions in the financial regulatory bill, is nonetheless now insisting that the miniscule consumer protection agency must be captured by financial interests - well, it's certainly audacious but hardly surprising. Financial firms know that if they are able to crony-ize and thus capture an office with the "consumer protection" name, they will not only be able to control that office's regulatory actions, but perhaps even have it stamp banks' usurious behavior with a "consumer protection" seal of approval.

This is why the banks' assault on Elizabeth Warren is so vehement - it represents both a defensive and offensive move. They want to prevent a savvy, eminently qualified and - here's the key quality - genuinely independent regulator from being vested with power to oversee (or at least expose) the financial industry's predatory business model. They also want to make sure that a crony gets the job - a crony who won't blow the whistle on such predation and who therefore will effectively legitimize the financial status quo.

So often, of course, nomination controversies are inane palace dramas that focus on individual personalities, rather than actual substance. But in the case of Elizabeth Warren and the new Consumer Financial Protection Bureau, this nomination controversy actually represents a much deeper battle over some of the most important substance of economic policy. This is a proxy war over how our government addresses a bank industry that brought our nation to the brink of economic collapse and whether our government believes consumers are entitled to genuine protection - and the outcome of this fight will tell us a lot about which side our government is really on.