Republicans Accuse Warren of Lying, Democrats Apologize

Elizabeth Warren and the fledgling Consumer Financial Protection Bureau endured a day of tough questioning and rude insinuations on Capitol Hill yesterday as GOP House members sought to discredit Warren and hamstring the new agency before it even begins operations.

Consumer advocates were not amused.

David Arkush, director of Public Citizen’s Congress Watch Division, said Rep. Patrick McHenry (R-N.C.) “waste[d] taxpayer money on a hearing that apparently has no purpose but to harass professor Elizabeth Warren and hamper the Consumer Financial Protection Bureau’s (CFPB) efforts to protect Americans from abuses in the financial sector.”

“These attacks on the CFPB may be good for Wall Street, but they are certainly bad for consumers,” said U.S. PIRG Consumer Program Director Ed Mierzwinski.

Show trial

Mierzwinski said the Congressional show trial was motivated by the success of the CARD Act, which studies say has been successful in reducing interest rates and fees paid by credit-card users. He said the CARD Act “shows that consumer protection works when it's not diluted or defanged by the banks.”

At yesterday's contentious Oversight and Government Reform Committee meeting, McHenry accused Warren of lying to Congress and of drafting a “superclass of administrative elites” to run the agency she helped create.

McHenry claimed Warren had misled the committee in her last appearance in March. He claimed she had not fully disclosed her role in providing advice to the state attorneys general who are negotiating a settlement with mortgage servicers.

Not one to be intimidated, Warren responded forcefully that, “I have been told that if you say anything in Washington often enough, it is eventually treated as fact — regardless of whether it is true or false.

“Shrewd tactics”

“While making baseless claims might be shrewd tactics for those who want to undermine the bureau’s work, they are flatly wrong,” she said.

Public Citizen's Arkush said it is McHenry who is being untruthful.

“[His] opening statement includes falsehoods about the CFPB,” Arkush said. “He writes, for example, that the bureau will have 'virtually unchecked discretion' to identify products and services that are unfair, deceptive or abusive. But in addition to Congress’ 'check' on the CFPB – Congress can pass legislation altering or even abolishing the agency at any time – the bureau suffers from an unprecedented lack of discretion: It can be overruled by other financial regulators,” Arkush said..

“Rep. McHenry also says that the CFPB’s 'budgetary authority' is 'unparalleled' because the agency’s budget derives from the Federal Reserve rather than congressional appropriations. It is comically false to call the absence of annual appropriations 'unparalleled' when the Federal Reserve’s budget isn’t appropriated by Congress either,” Arkush added.

An apology

The relentless attacks on Warren led one committee member, Rep. John Yarmuth (D-KY), to apologize to her.

“I apologize to the witness, Dr. Warren, for the rude and disrespectful behavior of the chair,” Yarmuth said. “The snarky comments about a Senate race, and 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 and your ability to communicate in very clear terms the threats to our consumers and the threats to our constituents and possibly very, very effective ways to combat them.”

“I congratulate you for instilling such fear in the committee,” Yarmuth said.