Rep. McHenry Seeks More Oversight Of Consumer Bureau

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Lester Lefkowitz | Stone | Getty Images

The war of words between Republicans and Elizabeth Warren should escalate later Tuesday when the special adviser running the Consumer Financial Protection Bureau testifies before a House subcommittee.

Rep. Patrick McHenry, R-N.C., chairman of the Oversight Committee's subcommittee on TARP, told CNBC Tuesday the bureau has been operating without oversight as Warren, claiming to be only an adviser, extends her role behind the scenes.

He cited the bureau's recent involvement in ongoing settlement negotiations with some of the nation's largest mortgage servicers.

"If it’s advice it’s one thing. But when the terms of the settlement meet the exact expectations of Elizabeth Warren's power-point presentation, that raises a great deal of questions," he said. "She insists on simply being an adviser to the president and the Treasury Secretary and it seems as though she and her agency have been acting beyond the scope and the power they’ve been given."

He is also angry the bureau, created by the Dodd-Frank financial overhaul law, is doing an end-run around Congress because it doesn't have to go through the appropriations process.

"The proceeds for the CFPB come from the profit of the Federal Reserve," he said. "Rather than returning it to the Treasury, they send a portion of it to the CFPB. [The bureau is] on autopilot for their funding so they don't have to come to Congress."

In prepared testimony released ahead of the 2 p.m. ET hearing, Warren said, among other things:

"I’ve been told if you say anything in Washington often enough it is eventually treated as fact regardless of whether it’s true or false, and while making baseless claims might be shrewd tactics for those who want to undermine the bureau’s work, they are flatly wrong."

McHenry said it would be "highly irresponsible" for President Obama to appoint Warren to officially run the CFPB while Congress is in recess.

Click on CNBC.com at 2 p.m. ET for live streaming video of the House subcommittee hearing.