That is the sort of question I get all the time from my business and banking contacts. And the White House may try to end run the Senate by temporarily appointing Warren to head the new consumer finance regulator. But how bad would she be for business and Wall Street (assuming she would be negative)? Here is how her opponents put it: “Let’s put an ideologue at the head of a new regulatory agency with extremely broad and undefined powers in a nation where business is crippled by uncertainty? Hey, what could go wrong?”

Then again, all the negative publicity might force her to be more moderate.  It also makes her an easier target for Republicans if they are in control of one of both Houses of Congress in 2011.  Here is what I wrote earlier this summer:

1. The Consumer Financial Protection Bureau created by the sweeping U.S. financial reform legislation will put Main Street protection under one roof. Though it technically will be housed inside the Federal Reserve, the agency will have vast power thanks to the fear of more sins like the ones that led to the housing crisis. It’s rare for a regulator to be empowered to perform “any” action necessary to protect consumers from abusive practices.

2. What’s more, virtually any link between consumers and a financial institution will get oversight. Rules will be tough to overturn. The new systemic risk council – made up of the Treasury secretary, Fed chairman and financial regulators – can only reject a proposal if it threatens the safety and soundness of the banking system.

3. The agency’s first director will set the tone, as well as precedent, for how far it can go. And Warren, who has been chairing a congressional panel overseeing the Tarp bailout fund, looks a leading candidate. The consumer protection bureau is her pet idea. The Harvard professor has said she believes banks are destroying the middle-class by loading them up with debt using deceptive products. Unions and anti-bank activists openly support her nomination.

4. Banks would prefer Michael Barr. Treasury’s point-man on the consumer agency is also an academic, but seems to have less of an ideological ax to grind. He may also be more sensitive to the need for financial institutions to earn their way back to health.

5. Warren’s bark is fearsome but Wall Street’s fears may be a little overblown. Rather than shutting down exotic ideas, she may instead push for more disclosure on them. But even if a Warren commission were to clamp down on some complex and risky products, it’s hard to believe the financial engineers won’t find a way to design simpler, and profitable, ones for consumers.