Elizabeth Warren Defends Consumer Financial Protection Bureau
Caroline Lorraine

Mar 16, 2011, 15:25

Elizabeth Warren defended consumer watchdog, the Consumer Financial Protection Bureau, at a congressional hearing on Wednesday. Warren, a White House adviser, praised the work of the CFPB, as House Republicans scrutinized the fledgling agency, according to the New York Times.

Warren defended the CFPB as a much-needed consumer watchdog with significant oversight powers, as well as transparency and accountability.

Members of a House financial policy panel raised questions about the bureau's power over financial products and argued that the agency needed greater oversight. Lawmakers also repeatedly raised concerns about its involvement in a proposed settlement of alleged abuses in the mortgage-servicing industry.

Rep. Shelley Moore Capito, however, the West Virginia Republican who leads the House Financial Services subcommittee on financial institutions and consumer credit, expressed her doubt.

She said many of her colleagues "have serious concerns about the creation of a new bureaucracy with little congressional oversight."

In her opening statement at the oversight hearing, Moore Capito said, "Many of us would have preferred to truly cut through the red tape and create a modern regulatory structure that demands better communication between federal regulators that provides consumers with the tools they need to report fraud in the system."

House Financial Services Committee Chairman Spencer Bachus (R., Ala.) suggested the agency had too much independence. "You are probably directing the most powerful agency that's ever been created in Washington," Mr. Bachus told Ms. Warren, who is preparing the agency for its July launch. "It's not a commission. It's one single person, and it will regulate all providers of credit, savings, payment and consumer financial products and services,� Bachus added.

Ms. Warren said in Wednesday's hearing that she was glad the consumer bureau had been able to provide advice, as federal and state officials work toward a settlement that could help address the overhang of mortgage foreclosures that is weighing on the housing market.

She said that the bureau provided advice after the Treasury Department and Justice Department requested it, and that if there had been "a cop on the beat" years ago, the mortgage-servicing problems wouldn't have happened.

"We are proud to be helpful," Warren said.

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