Elizabeth Warren, architect of the Consumer Financial Protection Bureau
, defended the fledgling agency from allegations that it lacks appropriate oversight while speaking to journalists at the Society of American Business Editors and Writers Conference
in Dallas on Friday.
"The consumer agency will be subject to the administrative procedures act," Warren said. She added that the CFPB also is subject to judicial review to ensure it stays within the constraints of lawmakers and can be overruled by Congress.
"The consumer protection agency is the only bank regulator whose rules can be overruled by another group of agencies," she said. "We cannot interfere with other agencies' rulemaking efforts, but other agencies can veto our rules. This is another assurance that we can be held accountable for our actions."
Warren said the CFPB also is subject to procedural and funding issues, although under its current funding model, the bureau is one of a few agencies that will not be impacted by the possibility of a government shutdown.
"The amount of money we get is a portion of the Federal Reserve
's budget as it exists in 2012," she said. "If we need more than that, we have to go back to Congress and ask for more money."
Warren acknowledged the political infighting surrounding the agency and its role in overseeing consumer issues tied to home mortgages, student loans and other lines of consumer credit.
"There are proposals to repeal the consumer agency and Dodd-Frank, which would eliminate the agency before it's born," she said.
Warren said quashing the agency would benefit some of the parties responsible for causing the crisis.
"Political independence is important for a bank regulator to be strong enough for the agency to help the consumer public," she said. "Many regulators began with good intentions but were captured by the very group they were employed to regulate."
Write to Kerri Panchuk