House Republicans used a committee hearing Thursday to accuse those setting up the new Consumer Financial Protection Bureau of not disclosing enough information and for not spelling out what financial products it plans to target for increased scrutiny.
"At the core of our mandate is the prevention of waste, fraud and abuse in the federal bureaucracy, and there is no question that improved efforts to combat deceptive practices in the financial sector are needed. Neither is there a reason why the administration should avoid a candid, transparent account to Congress about its policy and practices in this regard," said House Oversight & Government Reform Committee Chairman Darrell Issa (R-Calif.).
Elizabeth Warren, who has been leading the set up of the CFPB, which begins operation next Thursday, said her staff has been responsive to inquiries and the bureau will be transparent about its finances and its contacts with individuals.
She said that they would protect consumers by expanding disclosure requirements and don't expect to ban certain financial products or take measures to raise compliance costs.
Rep. Ann Marie Buerkle (R-N.Y.) said in light of high unemployment rate, she is concerned that any actions by the CFPB would raise compliance costs and cause companies to reduce hiring.
Warren responded that one of the bureau's first efforts will be to combine the disclosure forms required by the Real Estate Settlements Act (RESPA) and the Truth in Lending Act (TILA). She said this will make the process simpler for consumers and cheaper for financial institutions and noted that the bureau is working with banks and credit unions in its efforts.
Buerkle then asked if the bureau will "never, ever," make rules or policies that raise compliance costs.''
Warren said their work on RESPA and TILA will be a template for their efforts.
Rep. Patrick McHenry (R-N.C.) asked if the bureau saw any financial products it thought were so harmful that they should be banned.
Warren replied "No, do you have a suggestion?''
McHenry said "No, I don't have a half-a-billion dollar budget or 400 people working for me.''
Rep. Jim Cooper (D-Tenn.), who noted that he opposed last year's financial overhaul bill that created the bureau, criticized the tone of the hearing.
He said there have been "partisan food fights" that isn't an example of good governance. Cooper said that Warren had been "treated with rudeness and disrespect by some committee members."
Credit union leaders have expressed their concern over new regulations imposed on the industry, while Republican lawmakers have been working to weaken the new agency's powers and have promised to filibuster the nomination of whoever is ultimately selected by President Barack Obama to lead it.
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