Elizabeth Warren, the unofficial head of the new Consumer Financial Protection Bureau, pushed back against GOP attacks on Wednesday, arguing that financial institutions guilty of precipitating an economic collapse must be held accountable, too, not just she and the bureau they adamantly oppose.
"I hope that every time we talk about accountability, that we are also talking about the accountability of financial institutions… that there will be a cop on the beat to make sure that they follow the law," Warren said on Wednesday at a House Financial Institutions and Consumer Credit Subcommittee hearing.
Warren, the sole witness, argued that she and the CFPB do not have nearly as much power as Republicans claim.
She said the Financial Stability Oversight Council can knock down any bureau proposal, and that the CFPB does not have nearly enough money without additional appropriations from Congress to adequately enforce protections against mortgage servicers and other providers of financial products that have previously fallen through the cracks.
"Let me remind everyone about the structure of this new bureau. It is the only agency in all government… whose rules can be overruled, obliterated, wiped out, negated by other agencies," Warren said. "The consumer agency has to come back to Congress and ask Congress for more money. That means that the consumer agency is not the strongest agency in government, it is the most constrained and the most accountable agency of government."
The hearing served as an opportunity for Republicans to vent their frustrations over the failure of President Obama to appoint a permanent director, who would need to survive the scrutiny of Senate confirmation. That would likely be an uphill hurdle for any nominee given the fierce philosophical GOP opposition to the bureau, which they argue consolidates too much power without sufficient oversight, particularly since it enjoys a dedicated base funding stream directly from the Federal Reserve Board.
The bureau becomes officially operational in July. Warren, who is technically the Treasury Secretary's special adviser on the bureau, has limited power in that role. Republicans nonetheless hammered her on what she is doing from her perch, particularly asking about her involvement in efforts to reach a global mortgage servicing settlement as a solution to rampant improprieties in the foreclosure process.
Financial Services Chairman Spencer Bachus , R-Ala., asked Warren pointedly, "Do you envision yourself as the acting director?"
After Warren said that no there is no such person and that she is acting only in an advisory capacity as the new agency gets off the ground, Bachus asked about when Obama intends to make an appointment and whether she would accept a recess appointment.
"There is a process in place," Warren said. "I understand there will be a nomination soon, but that's all I know."
Later, Rep. >Patrick McHenry>, R-N.C., wanted to know whether Warren understood how controversial her role is as a political adviser to the president engaging in discussions with the Justice Department and other officials about a mortgage servicing settlement.
Warren held her line repeatedly, saying that she has only offered suggestions on how to craft servicing standards, that it will be up to the bureau to enforce them, and she reiterated that neither she nor the bureau have any power to weigh in on the size of settlements.
"I answer when the president asks for my advice," she said.