In her perpetual campaign to win over the many opponents of the new Consumer Financial Protection Bureau, Elizabeth Warren has crisscrossed both the capital and the country for months, meeting with bankers and business owners and lawmakers.
On Tuesday, that quest took her only several blocks to the headquarters of one of the agency’s most ardent critics, the U.S. Chamber of Commerce, which spent millions of dollars and countless hours trying to prevent the creation of the consumer bureau last year. Warren, the Harvard law professor appointed to stand up for the new watchdog, joked that her visit had been likened to Daniel in the lion’s den or President John F. Kennedy speaking to Protestant ministers.
“I think it’s all in good fun, but I actually think the analogies are wrong,” she said. “I don’t want to minimize our differences, but I think it’s important to find our common ground.”
That common ground, she added, came down to one word: competition.
Warren said believes in competition and free markets, and she argued that only through fair and consistent regulation can those markets function properly.
She had an uphill battle.
Warren’s half-hour appearance was sandwiched between speeches by House Financial Services Committee Chairman Rep. Spencer Bachus (R-Ala.) and chamber president Tom Donohue, both of whom called for major changes to the bureau’s structure, such as subjecting its funding to congressional approval and replacing its independent director position with a five-member commission.
Bachus spoke first and received a warm introduction as “a friend to the taxpayer,” “a friend to the chamber” and “a friend to free enterprise.”
He argued in favor of installing a five-member commission at the consumer agency, saying that otherwise a single director like Warren would have “total discretion” to deem certain financial products abusive and to write onerous new rules.
“If George Washington came back today, or Abraham Lincoln, or if Warren Buffett signed up, I wouldn’t give that person total discretion,” Bachus said, adding, “Collective wisdom is much better in this case.”
Speaking after Warren, Donohue argued that a commission “would provide a lot more balance and accountability,” he said, adding that such a structure could win support from both parties. “There are a lot of Democrats who would not like to have one Republican sitting in that seat.”
For her part, Warren defended the agency in its current setup, in which it receives its funding from the Federal Reserve and has a single, independently appointed director.
“Not one other banking regulator — not one — is subject to [congressional] appropriations,” she said. “Requiring the CFPB to go into every examination against a trillion-dollar company knowing that the company could turn its lobbying force against the agency’s funding is not a prescription for fair and evenhanded enforcement.”
She added that the bureau’s rules could be overturned by a group of fellow regulators and that a panel must review the possible cost of proposed rules. Still, she insisted, putting in place meaningful new rules and enforcing ones already on the books would permit “honest competition to flourish.”
“We can differ over the form and substance of regulation,” Warren said, “but let’s not deny the important role of regulation.”