WASHINGTON — House Republicans stepped up their attacks on Elizabeth Warren Tuesday, contending the Obama administration official charged with setting up the new Consumer Financial Protection Bureau had lied to Congress.
Rep. Patrick McHenry of North Carolina, the chairman of the House Oversight subcommittee on the Troubled Asset Relief Program and financial services, accused Warren of misrepresenting the fledgling agency’s role in mortgage negotiation settlements. And McHenry continued to push Warren, a Harvard professor, on how much authority she believes the new bureau should have in policing Wall Street.
“Professor Warren testified that the bureau’s role in ongoing mortgage settlement negotiations was limited to ‘advice’,” the Republican McHenry said in a prepared statement. “Since her testimony, however, Congress received evidence that Professor Warren and the bureau were deeply involved in the negotiations.”
Since taking control of the House in January, Republicans have been critical of the CFPB and have intensified attacks throughout the spring.
At stake: How much authority the new bureau, created in the sweeping Dodd-Frank financial reform legislation and scheduled to launch on July 21, should have in regulation.
“Once fully operational, the bureau will possess virtually unchecked discretion to identify financial products and services that the director determines to be ‘unfair, deceptive, or abusive,’” McHenry said.
Warren denied claims about the bureau’s unchecked power, saying that the CFPB is not even close to being the most powerful banking regulator.
“…Those claims ignore what we are doing — building an agency in plain sight, with help from good people across this country,” Warren said in a prepared testimony. “Together we can create a fairer system that works for families and works for the community banks, credit unions and other financial institutions that want to serve those families honestly and openly.”
Republicans have suggested that a bipartisan panel should head the group, instead of the one leader system mandated by Dodd-Frank. The House Financial Services Committee approved a measure this month that would replace the director’s position with a five-member bipartisan commission.
Rep. Barney Frank, Democrat from Massachusetts, one of the architects of the law that ushered in the CFPB, has said he expects President Barack Obama to make a recess appointment to avoid challenges from Republicans on a nominee. Warren remains a candidate for the director position.
But Rep. Ann Marie Buerkle, Republican from New York, said a recess appointment would undermine Congress’ power as lawmakers. She is worried that a CFPB head will not have to go through the confirmation process.
Democrats defended Warren and the CFPB after a round of questioning from House Republicans. Rep. John Yarmuth , Democrat from Kentucky, apologized for the “rude and disrespectful behavior of the chair”.
“This hearing is all about impugning you, because people are afraid of you and your ability to communicate in very clear terms the threats to our consumers,” Yarmuth said.
Ranking member Elijah Cummings, Democrat from Maryland, lauded Warren’s work saying many Americans “applaud” what she is doing.
Sen. Sherrod Brown, Democrat from Ohio, , chairman of the Senate Banking subcommittee on Financial Institutions and Consumer Protection, responded to the contentious hearing with a statement in support of the new agency.
“Conservative Washington politicians might like to forget that the financial crisis ever happened,” Brown said. “Consumers deserve protection from abusive rates, fees, and penalties in mortgages and credit cards.”