ABC News’ Arlette Saenz reports:
House Republicans showed their contempt for the Consumer Financial Protection Bureau in the first oversight hearing for the agency, arguing it lacks accountability and allows one person to wield too much power.
Elizabeth Warren, the Obama administration advisor charged with setting up the CFPB, defended the agency amid stinging criticism from Republicans during a House Financial Services subcommittee hearing.
“If we had had this agency 6 years ago, 8 years ago, we would not be in the mess we're in today,” Warren said.
House GOP members lambasted the agency for insufficient congressional oversight and for operating with one person in charge rather than establishing a board to oversee the agency.
“You have a lot of discretion and a lot of power, but I see very little accountability,” Rep. Spencer Bachus, R-Ala., Chairman of the House Financial Services Committee, said.
“I look at this congress – we are the voice of the American people, and when we don't have any oversight of what you're doing, I see that as incredibly problematic,” Rep. Sean Duffy, R-Wis., said.
But Warren countered the attack, arguing that the accusations are not true.
“The consumer agency is not the strongest agency in government. It is the most constrained and the most accountable agency in government,” Warren said.
The CFPB is funded through the Federal Reserve and is not part of the appropriations process, and the Financial Stability Oversight Council possesses the ability to overrule decisions made by the agency.
Committee members also questioned the role of CFPB staff in ongoing rulemaking discussions regarding mortgage servicers. Warren admitted the agency has offered advice to Treasury and the Department of Justice when asked, but it has not taken part in any decision making discussions. Warren pointed to the future influence the CFPB could have in the mortgage servicing industry.
“The mortgaging servicing problem illustrates the importance of fair consistent enforcement,” Warren said. “We need a cop on the beat that American families can count on. It is critical that we get this right.”
The CFPB was established by the Dodd-Frank Wall Street Reform Act in 2010, but the agency does not begin to assume responsibilities until this summer. Warren was tasked with setting up the agency when President Obama and Secretary Geithner named her as assistant to the president and special advisor to the Secretary of the Treasury on the CFPB.
The president has not nominated someone to formally take charge of the agency in the summer, prompting some GOP members to take issue with Warren’s current role at the agency.
At the White House Press briefing today, White House Press Secretary Jay Carney addressed the Republicans’ concern with the CFPB, saying the White House is confident there will be substantial oversight for the agency.
“The whole point of the creation of the bureau was to consolidate authority scattered across government to create real accountability,” Carney said. “If you look closely, I think you'll see there actually there will be more oversight and accountability … of the CFPB than there is of any other federal banking regulator. So yes, we are confident that there is substantial and sufficient oversight.”