Warren was picked in 2008 to lead the Congressional Oversight Panel, a watchdog group to oversee the government's $700 Troubled Asset Relief Program, known as TARP.
As head of the panel, Warren quickly proved to be a formidable force as she routinely criticized policies and decisions at Obama's Treasury Department under the leadership of Tim Geithner. She blasted the agency's embattled foreclosure prevention program this summer as "behind the curve."
In a report released Thursday, the panel said the bailout had only enjoyed "limited" success at its broader goal of helping the economy at large, an outcome that has caused a widespread public backlash and could prevent the government from making future bailouts.
"Popular anger remains high about taxpayer support of America's largest banks, and that anger has only intensified in light of the continuing economic turmoil," the panel said in the report. "The TARP's unpopularity may mean that, unless the program's effectiveness can be convincingly demonstrated, the government will not authorize similar policy responses in the future. Thus, the greatest consequence of the TARP may be that the government has lost some of its ability to respond to financial crises."
Such blunt talk is par for the course for Warren, but not for Washington, where reports are usually written with more subtle language, composed in a kind of hidden code. Warren is fond of recalling an incident in early 2009 when an official on the Hill told her that one of the panel's initial reports was "too direct," suggesting that she take a more diplomatic approach.
"Well, then what's the point?" Warren replied.
The plain-spoken attitude ruffled feathers in Congress and the administration, where questions were raised about whether Warren -- a straight-shooting, no-holds-barred critic of both the financial industry and the federal government -- might be too controversial to win Senate confirmation.
Earlier this summer, sources told ABC News that Treasury Secretary Tim Geithner had "concerns" about Warren, while powerful Senate Banking Committee chairman Chris Dodd raised doubts about support for Warren on Capitol Hill.
In recent weeks, though, Warren met with President Obama on several occasions and it became clear that she would indeed be given the chance to form the consumer protection bureau. Her selection has thrilled liberals, progressives, labor unions and consumer groups just weeks before the November midterm elections.
"I offer my congratulations to Elizabeth Warren, both for the work that she did to create the agency and for the fact that she will now have the opportunity to make it function as it was intended," said Rep. Barney Frank, chairman of the House Financial Services committee. "I am very pleased that the president agreed with those of us who pushed hard for Elizabeth Warren to be appointed."
"Elizabeth Warren is a true champion for consumers," said Gail Hillebrand of Consumers Union. "She would give the new bureau the focus and foundation it needs to succeed. People need a real financial watchdog in Washington to look out for their interests, and she's an ideal choice."