Elizabeth Warren Called Liar At CFPB Hearing By Republicans Who Botched Facts On Agency (VIDEO)
WASHINGTON -- Republicans attempting to grill Elizabeth Warren on the creation of the new Consumer Financial Protection Bureau had to be schooled repeatedly by the former Harvard professor Tuesday for botching basic facts and accusing her of lying.
Warren, appointed by President Barack Obama to implement the consumer watchdog mandated by last year's Dodd-Frank financial reform law, testified at a House Oversight subcommittee hearing dubbed "Who's Watching the Watchmen?"
But those overseers seemed to lack the basic facts about the new agency they were trying to oversee, with the hearing dissolving at the end in a remarkable dispute over how long Warren was supposed to testify.
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Rep. Ann Marie Buerkle (R-N.Y.) betrayed the first misunderstanding, quizzing Warren on why people getting hired at the CFPB earned better salaries than the average government employee. Warren eventually noted that federal financial regulators are usually paid better (but not very well compared to the people they regulate).
Rep. Frank Guinta (R-N.H.) mistakenly thought the CFPB was unique among financial regulators in having a leader with a five-year term and in not being subject to annual congressional appropriations -- neither of which is true.
"I don't believe anyone else in history has had that period of time as an appointment," Guinta contended of the five-year term.
"Congressman, I think many terms are five-year terms," Warren answered, pointing out that the head of the Office of the Comptroller of the Currency had just finished such a term.
Guinta then suggested that the agencies Warren compared to the CFPB actually had more oversight from Congress through annual appropriations.
"Those entities I think are at the discretion of Congress," Guinta argued. "There's an oversight process through appropriations -- you're excluded from that."
"No, Congressman, I'm sorry," Warren answered. "There is no banking regulator who is subject to the political process or to appropriations." Banking regulators, including the the Office of the Comptroller of the Currency, the National Credit Union Administration, the Office of Thrift Supervision and Federal Deposit Insurance Corporation, take fees from financial institutions for their budgets.
Rep. Trey Gowdy (R-S.C.) grilled Warren on whether the bureau would make public the complaints it gets. She answered that the complaint issue was a work in progress, but that at the very least, there was progress in creating a system for large credit card companies.
"Are any of the complaints public?" Gowdy demanded.
"Congressman, we don't have any complaints yet," Warren said of the still-nascent agency. "What we're trying to do is build the system."
Gowdy also seemed to think that Warren had written the Dodd-Frank law, and he was determined to know what Warren meant by defining "abusive" practices as something that "materially interferes" with the ability of a consumer to understand a term or a condition.
"That suggests to me that some interferences are immaterial. Is that what you meant by that?" he asked a momentarily perplexed-looking Warren.
"Congressman, I believe the language you are quoting is out of the Dodd-Frank act," she said. "This is the language that Congress has adopted."
Still, Gowdy insisted on her answer, although the definitions and regulations required by the law are still being written.
"You don't want me standing here shooting from the hip about how I might want to interpret individual language," she said.
Several members raised the question of the new agency's budget, which unlike any other regulator is capped by law at nearly $600 million.
So Warren offered up the budget for the CFPB's first two years: $143 million for the rest of 2011 and $329 million for 2012.
Republicans have cast the consumer protection bureau as a huge new agency with powers beyond anything that exists currently, arguing it's free from any outside restraints to punish financial firms at whim. They have offered legislation to turn it into a commission, make it easier for other federal agencies to overrule it and delay its start.
But Warren countered that the oversight and restrictions on the new bureau were "unprecedented."
“The bureau is the only bank regulator whose rules can be overruled by a council made up of other federal agencies,” Warren said.
The subcommittee chairman, Rep. Patrick McHenry (R-N.C.), began the proceedings by suggesting Warren had lied to the committee in a previous hearing that had questioned the CFPB's role in offering advice to state attorneys general negotiating a settlement with abusive mortgage servicers.
At the time, Warren said she was proud her agency had been able to help, at the request of the treasury secretary. But McHenry brought up the memo again, suggesting it showed that she hid a larger role in the negotiations from Congress.
"This is our job, and we're trying to do our job, to be helpful to other agencies, and to help those agencies to hold those who break the law accountable," Warren said, repeating that she was proud of the work.
The exchange prompted Rep. John Yarmuth (D-Ky.) to say he was sorry.
“I apologize to the witness for the rude and disrespectful behavior of the chair," Yarmuth told Warren. "The questioning of your veracity when there is documented evidence that you are being totally truthful indicates to me that this hearing is all about impugning you because people are afraid of you."
But perhaps the ugliest moment in the contentions sessions came at the end, when Rep. Elijah Cummings (D-Md.), the top Democrat on the Oversight Committee, pointed out that based on the emails his staff had gotten, McHenry was keeping Warren later than an agreed 2:15 p.m. ending time.
The session had been moved repeatedly, with the timing changing as late as Tuesday morning.
But McHenry insisted there had been no agreement, even though he, the subcommittee members and Warren all arrived there an hour early.
"I'm not trying to cause you problems, Ms. Warren," McHenry said.
"You are causing problems," Warren answered. "We had an agreement for a later hearing. Your staff asked us to move around so that we had to change everything on my schedule to try to accommodate your time ..."
"We agreed that I would be out of here at 2:15 because there are other things now scheduled at 2:30," she said.
"That was a request, " McHenry snapped.
"Congressmen, you told us one thing," Warren responded
"I did not tell you anything," he shot back, before adding to audible gasps in the hearing room: "You're making this up, Ms. Warren. This is not the case."
A shocked Cummings intervened, saying: "You just accused the lady of lying. I think you need to clear this up with your staff."
Cummings noted the time changes in the hearing, and a CFPB source later confirmed to Huffington Post that there had been a specific agreement.
McHenry later felt no apology was warranted, and slammed Warren in a statement, saying she had refused to answer all questions because two members had not had a chance with her.
“Committee staff worked diligently to accommodate Ms. Warren’s schedule," McHenry said.
"I was shocked by Ms. Warren’s blatant sense of entitlement," he added. "She was apparently under the assumption that she could dictate a one-hour time limit for her testimony to Congress and that we were there at her behest instead of the other way around. This is just further example of her disregard for congressional oversight.”
This story was updated to list the nation's bank regulators.