A slew of public advocacy groups, including the National Fair Housing Alliance, applauded President Obama’s appointment of Harvard Law professor Elizabeth Warren to lead a new consumer protection agency Friday.

Warren is now assistant to the president and special advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau created under the Wall Street Reform and Consumer Protection Act signed in July. She will take on the job of setting up the new bureau by mid-2011, including recruiting staff, initiating policy and helping choose the bureau’s first director.

The bureau will regulate mortgages, student loans, credit cards, credit scores and other consumer credit products. The consumer watchdog agency was Warren’s idea and she is the "best person" to turn that idea into reality, said Shanna L. Smith, National Fair Housing Alliance President and CEO, in a statement. The alliance has a mission to eliminate housing discrimination. Its board includes fair housing officials from around the country.

"The Bureau of Consumer Financial Protection will work to dismantle the two-tiered lending system that has disproportionately made the most dangerous financial products available to people of color while limiting their access to mainstream mortgages," Smith said.

"It is a tragedy that all of the homeowners who find themselves in foreclosure or foreclosed upon because of unscrupulous and discriminatory lending did not have such an agency to protect them, and it is critical that the Bureau begin its operations as soon as possible."

Some financial institutions have criticized Warren for "overly broad" attacks on "abusive, deceptive and unfair lending practices," the New York Times reports.

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