CFPB Hearing: House Panel Civil, But Still Testy

Consumers who tuned into Thursday’s hearing of the Congressional Oversight Committee may not have recognized what they were seeing. An earlier hearing, in May, about the government’s new watchdog agency, the Consumer Financial Protection Bureau, descended into a bunch of hotheaded yelling and accusations of lying, garnering quite a lot of press for a committee that is usually mostly ignored.

Well, the latest hearing seemed tailor-made to push the committee back into its customary sleepiness. Both sides admitted that they went a tad over-the-top during their earlier engagement.

“I think it’s proper to ask if we are maintaining the proper decorum and respect,” said Mike Quigley (D-IL). “I would respectfully submit that both sides have pushed the envelope on that.”

For her part, Elizabeth Warren, the president’s special advisor charged with creating the new agency, conceded that her refusal to stick around for a few extra minutes of questioning last time was a pretty serious political gaffe.

“I’ve cleared my schedule and I’m here for as long as you need me,” she said.

But that still left plenty of time for posturing, gamesmanship and downright nastiness, as Republicans and Warren parried over the proper role of the new bureau, which opens its doors on July 21. Many members of the committee raised concerns about the bureau’s power to ban products it deems “abusive” to consumers.

“How do you distinguish between abusive and non-abusive products and services?” asked Dennis Ross (R-FL).

Warren said her agency has not yet figured out what the criteria should be to determine which financial products should be banned, if any. That succeeded only in making Ross more flustered.

“That’s a large and important power, to ban an entire type of product. Don’t you think that’s something you and your team should be addressing?” Ross said.

Other Republicans challenged Warren on why the new bureau is even necessary at all.

“We keep hearing about illegal financial products,” said Rep. Trey Gowdy (R-SC). “If these products are in fact illegal, as a former prosecutor I want to know why you haven’t informed federal prosecutors about these illegal activities so that they can pursue these cases. Why do we even need your agency if these things are already illegal?”

As tensions grew, veteran Congressmen urged newcomers like Gowdy to take it easy.

“Congress is viewed as dysfunctional, and I would submit that this committee is dysfunctional, and this hearing is part of the reason why,” said Rep. Tim Cooper (D-TN). “This is a partisan food fight, and it doesn’t have to be this way.”

Other Democrats on the committee took the opportunity of Warren’s second hearing in as many months to blast Republicans for focusing so much attention on her and the new bureau.

“We have not brought the mortgage servicers in even one time to speak,” said Rep. Danny Davis (D-IN) “It seems pretty obvious that our priorities are somewhat backwards.”

Meanwhile, Republicans continued to raise questions about Warren’s role in the ongoing negotiations between mortgage loan servicers and the 50 state attorneys general on proposed new reforms for the industry. Republicans allege that Warren is overstepping her authority and continuing to lobby for her own version of a settlement.

Warren responded, as she has for months, that she only gave her advice when asked for it by Iowa Attorney General Tim Miller, who is leading the investigation, and that her involvement does not violate any rules.

Image: Mike Renlund, via Flickr