Goodness, some members of Congress really don’t like Elizabeth Warren. Is it because she’s a law professor? From Harvard? Or is it simply that she threatens to end “unfair, deceptive or abusive practices,” which is what the Dodd-Frank charges the Consumer Financial Protection Bureau (CFPB) with doing?
Consider what’s transpired in the last few weeks. Two weeks ago, House Financial Services Committee chairman Spencer Bachus (R-AL), along with key subcommittee chair Shelley Moore Capito (R-WV), “all but accused Professor Elizabeth Warren of lying to Congress” in the characterization of our colleague Ed Mierzwinski of U.S. PIRG. Bachus and Capito alleged that the existence of draft CFPB materials offering advice to the state attorneys generally about the negotiation of a settlement with the large mortgage servicers (4 of the 5 biggest are owned by the biggest banks) somehow means that the CFPB is meddling in matters beyond its purview.
And last week, several Members of Congress launched new efforts to immobilize the power of any new CFPB chief.
First, Senator Jerry Moran (R-KS) introduced a bill to make the CFPB subject to the congressional appropriations process. Presently, the CFPB’s budget derives from the Federal Reserve and does not need to be appropriated annually by the Congress—a process often characterized by unseemly special-interest mischief and interference with important agency missions. Next, Senator Moran introduced a bill that would freight the CFPB with a commission. House members introduced parallel legislation. A strong chief is needed to empower a new consumer protection agency; the goal of those proposing a commission structure is to slow the agency down and hamper it in performing its duties.
Republican members of Congress are not shy in their views. Rep Bachus infamously said, “In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks.” Rep. Blaine Luetkemeyer (R-Mo.) said the CFPB was “the last thing that our lenders need.” Rep. Robert Dold (R-Ill.) ridiculed the “theoretical consumer protection” the agency would provide.
“This is not about Elizabeth Warren,” Bachus said. “This is about giving one person total unbridled authority and power.”
But Warren hasn’t even been named to head the agency yet, and so to us this seems like it is about far more than Professor Warren and her work. The attack on the CPPB bears a suspicious taint of putting big banks ahead of the American public. There should be no reason for Members of Congress to shy away from ending “unfair, deceptive or abusive” banking. We implore them to do so.
Bartlett Naylor is financial policy advocate for Public Citizen’s Congress Watch
This piece originally appeared in The Hill.