Elizabeth Warren hearing turns contentious on all fronts
The political drama surrounding Elizabeth Warren, the force behind the Consumer Financial Protection Bureau, played itself out Tuesday when a House subcommittee grilled the CFPB architect on everything from her role in advising other regulators to her departure time from the hearing.
The hearing grew contentious at several points with lawmakers probing Warren with specific questions about her role in recommending a $20 billion settlement between state attorneys general and mortgage servicers.
The subcommittee's chairman Patrick McHenry (R-N.C.) pushed Warren on previous congressional testimony in which she characterized the committee's involvement in the mortgage servicing settlement proposal to a situation where she gave advice when asked for it. McHenry asked, "If you are so proud and enthusiastic about your advisory role and advice, why didn't you express that in the settlement issue?"
Warren responded saying, "We gave advice when asked." When further probed about whether she would disclose information from settlement meetings, Warren said, "Congressman, my calendar is an open book."
McHenry shot back, "Are you saying it shows you discussing those items?" Warren stated later in the conversation, "We have provided advice to federal and state officials regarding a potential servicing settlement. We have been sharing our analysis and recommendations in creating a solution that would hold servicers accountable."
Warren also said her office had sent a statement responding to questions brought up on the mortgage servicing issue by lawmakers and never received a response.
Congresswoman Ann Marie Buerkle (R-N.Y.) pointedly asked Warren why starting salaries for posted CFPB positions are 60% to 90% higher than equivalent government positions. Warren responded, "We are following the law set up in Dodd-Frank, the five banking regulators are paid on a different pay scale, and the reason is because they are bank regulators and competition for those jobs includes people who are in the financial services industry."
Buerkle shot back saying, "This is not the private sector. The government needs to be accountable to the people. It just seems like this regulatory body has questions to answer given the huge disparities in salaries."
The contentious nature of the hearing escalated when one lawmaker grew frustrated after Warren refused to answer "yes or no" to a pointed question about whether consumers bear some responsibility for understanding the terms of their mortgages in the new regulatory environment. That same exchange covered several areas that have left the mortgage industry concerned about Dodd-Frank provisions that would allow the bureau to flesh out some of the rules dealing with predatory lending.
When asked if the bureau will keep complaints against companies private or if they will be public, Warren never provided a yes or no answer, only stating that "we are trying to work with the industry to find a system that works."
Warren's questioning climaxed in a crescendo of conflict when McHenry and Warren got into a heated 10-minute debate over Warren's departure time from the meeting.
The pair argued, with Warren contending she had planned to leave the hearing at 2:15 EDT after adjusting her schedule to accommodate a change the subcommittee made to the hearing on Monday.
McHenry fired back saying a departure time was never discussed, which resulted in a heated exchange between McHenry and at least one lawmaker who accused McHenry of suggesting Warren was lying before consulting his own congressional staff on the hearing times.
"She is accusing me of making an agreement that I haven't made," McHenry fired back. ??Warren responded, saying "Congressman, you may want to have a meeting with your staff. I said I can only agree to stay until 2:15." Warren then offered to answer questions for the public record and advised McHenry to send those questions on to her.
The heated debate highlighted the contention already surrounding Warren, one of the most controversial figures in the mortgage finance industry. During the meeting, Warren never directly answered McHenry's question about whether she would accept the director of the CFPB post. Instead, the Harvard professor avoided a "yes" or "no" response to the question, saying only the decision is up to President Obama.
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