Elizabeth Warren, the Harvard law professor charged with setting up the Consumer Financial Protection Bureau (“CFPB”) will testify today before the House Oversight Committee in Washington, D.C. The topics will be the "intentions, transparency and accountability" of the new Bureau. We hope the hearing today will be more civil than an earlier hearing in May, called by Rep. Patrick McHenry (R-N.C.), in which the congressman’s personal dislike for Ms. Warren overshadowed her testimony.
The CFPB officially opens for business on July 21, 2011, a week from today, and it is still without a director. The agency was created last year as part of Congress’s overhaul of financial regulations. The purpose of the board was to be an advocate for consumers, a need that has become painfully obvious given such such scandals as “robosigning” and “too big to fail” in the powerful banking and financial industries.
But certain members of Congress have expressed concerns that the CFPB itself might be too powerful, and may lack sufficient oversight. Warren’s testimony today will give those members, and Ms. Warren, an outspoken consumer advocate, one more chance to air their concerns before the CFPB opens.
Republicans yesterday sought to include a provision in a broader bill that would limit the CFPB’s budget, and make its funding subject to congressional approval. Currently the agency is funded through the Federal Reserve.
Many of those who have spoken out against the board use words like “nanny state,” claim the CFPB will promote more regulations and higher costs, and say that Ms. Warren is elitist and will act to protect only the elite.
Day in and day out, we see people who have been abused and taken advantage of by banks and financial institutions. The balance of power is tipped in favor of these institutions. They are big businesses, and their first concern is to maximize returns for shareholders. They don’t care if you lost your job, suffered a serious illness or accident, are a primary caretaker for a family member or what your story is.
Wall Street, banks and the financial industry – they don’t need any more help or protection - they've already got plenty. But consumers do. That’s why we need the CSFB. And the CSFB needs to have some teeth. If it’s going up against banks and financial institutions, being too powerful isn’t really a concern. The real question is – will it be powerful enough?
Here's a great interview Jon Stewart did with Elizabeth Warren regarding her role in overseeing distribution of the TARP "too big to fail" money.