(Bloomberg News) Elizabeth Warren, the Obama administration advisor assigned to set up the Consumer Financial Protection Bureau, said lawmakers looking to limit the agency's authority should focus instead on the Wall Street "behemoths" aiming to undermine its mission.
"If we're going to go out there and spill ink on accountability, we should also ask about how to hold powerful financial institutions accountable," Warren said yesterday in an interview with Bloomberg News. "The idea that we should be worried that some agency that will speak up for consumers might get a little too loud is looking in the wrong direction."
Warren was responding to complaints by Republican lawmakers that the agency, created by the Dodd-Frank Act in a Democrat-run Congress, lacks accountability. Republicans, who took control of the House in November elections, have proposed subjecting the bureau's budget to congressional approval and replacing its yet-to-be-filled director's post with a five-member commission.
Dodd-Frank, the rules overhaul enacted in response to the 2008 financial crisis, gave the bureau power to regulate consumer financial products sold by companies ranging from JPMorgan Chase & Co. and Citigroup Inc. to payday lenders and mortgage brokers. It is scheduled to begin work on July 21, a year after President Barack Obama signed the legislation.
Obama's appointment of Warren, 61, to help shape the bureau has been faulted by Republicans, including Representative Patrick McHenry of North Carolina, who say her role as adviser to the Treasury secretary and assistant to the president injects politics into what is supposed to be an impartial regulator.
'Not a Problem'
Warren, a Harvard University professor who specialized in consumer bankruptcy law, said her professional experience is an asset in the White House role.
"I've done 30 years of research on middle class economic issues and I bring that background and insight to the work I'm doing," she said.
Warren, who said the effort to find a director nominee is proceeding "very carefully and deliberately," said requiring Senate confirmation for the presidentially appointed post makes the bureau accountable to Congress.
Dodd-Frank stipulates that the bureau's spending be set as a percentage of the Federal Reserve's operating budget, which would give it as much as $500 million annually. Putting its budget into the appropriations debate would discourage examiners from making decisions that displease big banks, she said.