In a speech Friday, Consumer Financial Protection Bureau leader and assistant to President Obama, Elizabeth Warren stressed the importance of accountability and defended the agency against proposed bills that aim to limit its authority.
Warren’s speech, given before the Society of American Business Editors and Writers at the group’s spring conference in Dallas, outlined the responsibilities of the CFPB and addressed its potential limitations.
“There are proposals in both chambers of Congress for Dodd-Frank repeal, which would eliminate the consumer agency before it’s born. In other words, we would stick with a failed system,” Warren said in her address, which she made following a hearing last week regarding the Bureau’s structure and authority. That hearing, held on April 6, examined proposals that would change CFPB governance from a single director to a five-member commission, appointed by the President, with no more than three members from the same political party. Another proposal would make it easier for the Financial Stability Oversight Council to overturn CFPB regulations.
Warren spoke of the increasing danger of debt used by American families leading up to the recent economic collapse and “hollowing” of the middle class. The CFPB aims to help make markets fair for buyers and sellers, and improve accountability, according to Warren’s remarks. However, she said, the agency has a unique challenge.
“The CFPB is the only bank regulator—and perhaps the only agency anywhere in government—whose rules can be overruled by a group of other agencies,” she said. “… While we cannot interfere with other agencies’ rulemaking efforts, no matter how much we think consumers will be harmed by their rules, other agencies can veto our rules. This is an extraordinary restraint, another assurance that we can be held to account for our actions.”
Specific proposed legislation pointed to by Warren would subject the CFPB to the appropriations process, a restriction she said would damage accountability of the agency.
In addition to holding the marketplace accountable, Warren closed remarks with a request: “Please stay engaged with the consumer agency.” Through a website launched in advance of the Agency’s enforcement, scheduled to take effect on July 21, the CFPB continues to communicate with consumers. “If you’ll stay engaged, we’ll do our best to make sure you can always see what we’re up to,” she said.
See Warren’s prepared remarks.
Written by Elizabeth Ecker