Longtime bank critic Elizabeth Warren won her fight for a Senate seat late Tuesday, marking the end of a grueling and expensive campaign.
The financial services industry has been watching her race closely, fearful that Warren may continue her harsh attacks on banks as a member of Congress and press for stricter regulations.
Bankers across the country donated money to Warren's opponent, Republican Sen. Scott Brown, but were ultimately unable to blunt the momentum her campaign received after she spoke in a prime-time address at the Democratic National Convention.
"It's hard to be enthusiastic about someone who thinks you're a bad person. They've taken her attacks on the financial services industry personally," said Mark Calabria, director of financial regulation studies at the Cato Institute. "She has made herself into a symbol of the left, and has done so at the expense of the banking industry."
While it's still too early to know what course Warren will chart in the Senate – or whether she may join the Banking Committee – industry representatives were already speculating that she may have a significant impact.
To be sure, some argue that Warren will be less outspoken and more conciliatory once in the Senate, particularly given her stature as a first-term lawmaker in a chamber that still puts a lot of emphasis on seniority.
"The Senate is the Senate, and it doesn't change its folkways and customs for anyone. Was Hillary Clinton handed the key to the Senate treasure, even though she was one of the two or three best known senators instantly in 2001? Not a chance. She had to work her way up in the Senate structure in all the usual ways," said Larry Sabato, director of the Center for Politics at the University of Virginia. "It will be exactly the same for Elizabeth Warren. In fact, if her staff is serving her well, they'll point to Hillary, Al Franken, and many other celebrity senators as examples of how it must be done."
But others predict that Warren will be more willing to wade in publicly on issues dear to her, such as oversight of the CFPB – a subject Republicans are anxious to address.
"Sometimes in the Senate you need someone who's willing to put everything on the line to protect a program and shut the place down," said Edward Mills, a financial policy analyst at FBR Capital Markets and former Hill staffer. "For her, CFPB and protection against changes that would weaken its power would be an issue big enough to do that."
Republicans sought last year to change the leadership structure of the agency, eliminating its director and replacing it with a five-member board. The GOP also wants to subject the CFPB to the appropriations process and make it easier for the banking regulators to overrule the consumer agency.
Warren would undoubtedly fight any such efforts.
"She's not the first consumer advocate out there, but how many other advocates out there have put together such a powerful political machine?" Mills said. "People are concerned that she would certainly be a firewall against changes to the CFPB – it's her baby."
Others agreed Warren may be more willing to make a splash than most first-time senators.
"She'll be a very active senator," said Brandon Barford, vice president at ACG Analytics and a former Hill staffer. "I don't think she'll take the Hilary Clinton route – coming in with a high profile, but keeping her head down and working to develop personal friendships with other lawmakers."
"She'll literally stand filibustering as Strom Thurmond did in the 1940s – I definitely see that happening," he added, pointing for example to the reauthorization next year of the Higher Education Act, which likely could include several student lending provisions.
Warren may also have her eye on even higher office. After her speech at the convention, political pundits were quick to suggest Warren could potentially run for president in 2016. If Warren is considering such a move, it would affect her Senate actions.
"She may have to blaze her own path on specific issues with a [presidential] campaign in mind," said Brian Gardner, a policy analyst at Keefe, Bruyette & Woods. "She'd be playing towards Democratic primary voters, with her eyes on 2015, and I would suspect she would take a strident populist tone."
The most important question bankers have is whether Warren will seek or secure a seat on the Banking, Housing and Urban Affairs Committee, where she would be able to deepen her focus on financial issues.
At least two Democratic committee members are leaving at the end of the year: Sens. Daniel Akaka, D-Hawaii, and Herb Kohl, D-Wis., didn't seek reelection. Sen. Jon Tester is in a close race and may lose his seat as well. Currently, Democrats have a 2-seat edge on the panel but that could change depending on the final makeup of the Senate.
If Warren does take a seat on the committee, observers said she's likely to focus on raising issues, rather than drafting legislation. She would be in a position to impact any number of regulations related to the Dodd-Frank reform law and may use her Senate seat to spotlight consumer problems related to payday loans and check cashing, two areas the CFPB is reviewing.
"She's not going to successfully pursue the legislative route, but she'll conduct very diligent staff investigations and write letters, asking tough questions, demanding prompt responses from institutions and regulators and using an aggressive media strategy," said Barford.
"If she builds coalitions around specific issues, she could cause a lot of lobbying dollars to get spent," he added. "She could also cause a great deal of volatility of financial stocks through diligent oversight and questioning."