Warren to refute 'overblown claims' against CFPB before subcommittee
Elizabeth Warren, the architect of the Consumer Financial Protection Agency, is still mum about who will be serving the agency as director, but still very vocal about defending the bureau she helped create to oversee mortgage and consumer lending in the United States. In written testimony prepared for Tuesday's hearing in front of the House subcommittee on TARP, financial services and bailouts of public and private programs, Warren lashed back at criticisms from lawmakers who claim the bureau lacks sufficient oversight. "There have been many overblown claims about the nature of the CFPB’s power," Warren said. "Critics have claimed that the CFPB is 'the most powerful regulatory agency that’s ever been put together,' that it is 'the most powerful agency ever created, and that it 'doesn’t have to explain what it does to anybody.' " Warren plans to dispute those barbs in her testimony. "These claims disregard the limits on the consumer bureau’s authorities and the very meaningful oversight that Congress imposed over its functioning — oversight that is consistent with that which exists over other independent agencies," she will tell subcommittee members. Warren said the CFPB is limited by the Administrative Procedure Act and remains one of only three agencies that is required to gather information from small businesses about the impact of the bureau's rules on the firms. "We are also specifically required to consider the benefits and costs of any proposed rules to consumers and providers," Warren said in her prepared testimony. "The CFPB’s activities are subject to judicial review, ensuring that the CFPB operates within the constraints set by Congress and the U.S. Constitution." Warren added that the CFPB is the only bank regulator that can be overruled by a council made up of other federal agencies and its funding levels are limited by monetary limits set by Congress. Warren said the agency has to submit annual financial reports to Congress, and the CFPB's director — whoever that will be — must report before Congress twice each year regarding the bureau's activities. In addition, audits will be conducted by Government Accountability Office, and the Federal Reserve will review the bureau's activities and report its findings to Congress and the public. "Recent proposals to alter the CFPB’s structure — including those that the House Financial Services Committee recently passed — overlook the many constraints already in place," Warren said. "The work facing the new bureau is very challenging; additional restrictions would undermine the consumer bureau before it even begins its work of protecting American families." Warren's testimony in front of the subcommittee will come after months of debate over the role of the CFPB and of Elizabeth Warren herself. Lawmakers proposed bills earlier in the year to lesson the new agency's power, even proposing alternatives such as a CFPB that is run by a committee rather than a single director. While Warren is still considered as the front-runner to serve as the agency's director, a leader has yet to be named. And some congressmen are attempting to harness the agency's power by at least dissolving the director role. Write to: Kerri Panchuk.