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Republicans say CFPB overstepped on mortgage servicing issues

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Republican lawmakers sent a letter this week to Consumer Financial Protection Bureau architect Elizabeth Warren, saying they can prove the CFPB overreached by suggesting state attorneys general settle with mortgage servicers for $20 billion. The letter, drafted by Sen. Spencer Bachus (R-Ala.), claims Warren appeared as a witness before a House subcommittee and "repeatedly declined to acknowledge that the CFPB had participated in foreclosure settlement negotiations." Bachus wrote that Warren only confessed to providing "advice" and "expertise" to federal and state officials. However, Bachus said a presentation titled "Confidential for AG Miller" is a private draft document that proves Warren and the CFPB played a role in helping Iowa Attorney General Tom Miller and a group of AGs shape a $20 billion settlement proposed to mortgage servicers. "Page 2 of the CFPB settlement presentation offers suggestions for monetary penalties," Bachus wrote. He quotes the CFPB presentation as saying "rough estimates suggest that the largest servicers may have saved more than $20 billion through under-investment in proper servicing during the crisis," and a penalty of $5 billion would be too low. Bachus suggests in the letter that Warren and the CFPB did more than provide advice to AGs on how to settle with mortgage servicers. He added that it was not the CFPB's right to do so because they lack true enforcement authority. Republican lawmakers have been pushing back at the CFPB for some time, claiming the agency also lacks appropriate congressional oversight. In the letter, policymakers request that Warren clarify her exact role in advising officials on the proposed mortgage servicing settlement. Write to Kerri Panchuk.

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