That’s how one member of the House Oversight Committee described Thursday morning’s hearing featuring Elizabeth Warren, the de facto leader of the soon-to-launch Consumer Finance Protection Bureau, who was alternately pummeled by Republicans and lauded by Democrats.
The agency, created by the Dodd-Frank financial overhaul last year, is scheduled to open its doors in a week, with a mission to protect consumers from unfair, abusive or deceptive financial practices, and promote consumer education.
“It was a hard fight to get this agency passed into law,” said Warren, who, as special adviser to the president, is overseeing its launch. “I thought once [Dodd-Frank] passed, this kind of fighting would be over… Obviously, I did not fully understand the politics of the situation.”
Concerns from Republicans were wide-ranging. Patrick McHenry (R-N.C.) asked Warren whether there were any financial products she thought should be eliminated. “I believe in markets,” not bans, she replied. When McHenry pressed her, Warren again said no — but asked if he had any suggestions, drawing laughter. McHenry shot back, “I don’t have a half-billion dollar budget and 400 people working for me. I thought you’d have some idea.”
Committee Chairman Darrell Issa (R-Calif.) held up a page of paper with all the text blackened out, the response to a Freedom of Information Act request by Judicial Watch for CFPB documents. The redacted response, he said, “was an abuse of disclosure…and speaks loudly…of whether the transparency you speak of is occurring.”
Warren was nonplussed. “I’m not sure what the request was for,” she said — not surprising, since it was actually directed to Treasury Secretary Timothy Geithner and the information was redacted at the request of the Justice Department.
Jason Chaffetz (R–Utah) complained about the CFPB’s budget, which contains only 10 line items. “Where is the detail of what you’re doing to do?…You seem to be hiding the details,” he said, complaining specifically about vague spending on “contractual services.” Warren pointed out that all the CFPB’s contracts can be found on the Web site USAspending.gov.
Ann Marie Buerkle (R–N.Y.) noted that CFPB salaries were 10% to 40% higher than the federal norm. “That’s more liberty than we’d like with American taxpayer dollars.” Warren replied, “We have the same salaries as the other banking regulators.” (She refrained from pointing out that the CFPB’s funding comes from the Federal Reserve, not taxpayers).
Buerkle also said she was “concerned that what you do will hurt job growth.” Warren responded, “We’re trying to make prices clear and risks clear. That’s not likely to cost people jobs. It will make them a little more secure.” Buerkle also asked, “Do you intend to raise compliance costs?” “No,” Warren said, pointing to the CFPB’s first major effort, a simplified mortgage disclosure form, that she said will lower compliance costs.
South Carolina Republican Trey Gowdy, who spoke mid-way through the lengthy hearing, said he counted the word “illegal” used 12 times. “Why do we need your agency?” he said, arguing that the Justice Department should handle law enforcement.
Frank Guinta (R–N.H.) complained that the director of the agency — one has yet to be nominated — can be “removed only for cause and is exempted from presidential control….[U]nintended power is vested in this particular position.” In fact, appointees at all independent agencies may only be removed for cause (as D.C. Court of Appeals Judge Brett Kavanaugh reiterated in July 1 opinion in an unrelated case). Warren pointed out that CFPB decisions can also be overridden by a vote from other agencies, an unprecedented check.
As for the Democrats, they focused mainly on the CFPB’s role in helping members of the military facing foreclosure, praising Warren — and apologizing for her treatment.
“This is one of the most incredible hearings I ever attended, because the two sides are so far apart,” said William Lacy Clay Jr. (D–Mo.). The CFPB, he continued, will “protect consumers from unfair, deceptive and abusive practices. If people here don’t understand that, I don’t know what we can do about that.”
Near the end, Jim Cooper, a Blue Dog Democrat from Tennessee who voted against Dodd-Frank, did seem to shame his colleagues into better behavior.
“All of us realize that people view Congress as dysfunctional, and this committee as dysfunctional. This alleged hearing is one reason why,” he said. “Let’s try to be civil to witnesses…We’re treating her as a partisan punching bag before she’s really even had a chance to serve….This lady is trying to do the right thing.”
Jenna Greene can be contacted at email@example.com .