The House Financial Services Committee held a hearing Wednesday to discuss how best to overhaul the nation's financial regulations, including expanding consumer protections.
Committee member Rep. Don Manzullo (R-Ill.) didn't play nice with all of his guests.
Ed Mierzwinski, program director of the U.S. Public Interest Research Group, testified in favor of proposed regulations:
"I would just say briefly that consumer groups think the new agency would cut through the red tape. There are twenty or so consumer laws. Currently there are seven -- or nine, depending on how you count them -- agencies that have authority over various parts of the law."
"But that's -- why don't you just eliminate all that crap?" responded a flustered Manzullo.
Mierzwinski pointed out that the Fed was failing to protect consumers, and suggested shifting the role of consumer protection from the Fed to a new agency. Mierzwinski's argument that "monetary policy conflicts with consumer protection," earned a sharp rebuke from Manzullo: "not if it's done correctly."
Manzullo had similar exchanges with Elizabeth Warren, chairman of the Congressional Oversight Panel that monitors how TARP money is spent, and Ellen Seidman, senior fellow at the New America Foundation.
Warren sided with Mierzwinski, saying that the Fed "want[s] to do monetary policy" and is "not interested in consumer protection." Again, Manzullo interrupted, saying "Yes they are. Mr. Bernanke is interested in consumer protection." Warren responded, "Then why hasn't he done anything?" Manzullo dismissed her remark.
The proposed reforms come after widely accepted failures in existing legislation to protect consumers from dodgy financial practices. But Manzullo deemed the financial collapse a result of over-regulation, not under-regulation.
When Seidman suggested that responsibility for consumer protection should be "moved over to [a] new entity," Manzullo responded: "Yeah, more federal jobs."
After Manzullo's aggressive line of questioning, Subcommittee Chairman Luis Gutierrez (D-Ill.) reminded the committee to be nice to its guests.
"We did invite these people to come and address us and we might want to treat them as such. ... They are our guests here in the People's house, and we might want to treat them at least with some modicum of respect for their answers."
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