Responding to criticism that the newly formed Consumer Protection Financial Bureau (CPFB) is too powerful, its acting head, Elizabeth Warren, told CNBC Tuesday that it’s the “most constrained of all federal agencies.”
“This agency, unlike other banking regulators, doesn’t set its own budget: That is set by the Fed (Federal Reserve),” said Warren. “This is an agency that, whatever it decides, can be overturned by a group of agencies.”
Warren added that the bureau’s decisions are subject to the same challenges and rules that other agencies face, such as court cases, and must abide by the Administrative Procedures Act.
The CFPB, the only agency created by the financial reform law called the Dodd-Frank Act, will be up and running in July. As the acting director, Warren said she's now staffing it and putting procedures in place.
Warren, a bankruptcy expert and former Harvard law professor, has been appointed by President Obama as a special advisor to the Department of Treasury, through which she oversees the consumer bureau. Critics say the Obama administration has declined to officially nominate Warren because she is unlikely to be approved by Congress, because she is a lightening rod among business leaders and Republicans.
The CPFB is “walled off by statute” from the Durbin amendment to the Dodd-Frank law, said Warren, whose agency has been accused of imposing an agenda on that addendum. The amendment, which sets a price on "interchange fees"—the amount a bank charges a retailer every time a consumer uses a debit card for a transaction—has drawn the ire of bankers.
“What we’re working on is how to make prices clear, risks clear, how to make it easy for customers to compare one product to two or three others,” said Warren. “Ultimately, that’s what makes markets work for consumers, for businesses that offer good products and what works for our economy.”