Warren Outlines Plan to Save the CFPB

Register now

Sen. Elizabeth Warren, D-Mass., rallied progressives on Tuesday night to launch a campaign to defend the Consumer Financial Protection Bureau and the Dodd-Frank Act.

"A dedicated grassroots effort can beat Wall Street at their own game," Warren told 3,000 consumer advocates on a conference call Tuesday night. "If the Trump administration, big bank lobbyists and their Republican friends in Congress want to get rid of Dodd-Frank, they are going to have a big fight on their hands."

Warren spoke for just eight minutes on a call sponsored by Americans for Financial Reform, a nonprofit coalition of 200 civil rights, consumer advocacy and labor groups, and others that support tough financial regulations. Many of the groups have for years sought to pass rules to regulate payday lenders and to ban mandatory arbitration clauses in financial contracts, two rulemakings currently in progress by the agency.

Warren urged the advocacy groups to play offense and defend the CFPB, which was created by the Dodd-Frank Act in the immediate aftermath of the financial crisis of 2008.

"We didn't get a consumer agency because Wall Street decided to compromise with us," Warren said. "We got it because we went out there and we fought for it. We said, 'This matters to us. This matters to people all over the country.'"

Warren even briefly reflected on the outcome of the election.

"Obviously this election didn't turn out the way we wanted," she said. "President-elect Trump has said he wants to repeal Dodd-Frank and take cops off the beat on Wall Street."

She said the CFPB had widespread support from majorities of Democrats and Trump voters.

"Now it's our job to defend it," she said. "The consumer agency has a record, it has allies, it has millions of people across this country that it has helped. We are going to protect the agency and protect Dodd-Frank."

Warren promised a hard fight with Congressional Republicans, which have sponsored dozens of bills to restructure the agency, including change its single-director structure to a five-member commission and subject its budget to Congressional appropriations. Currently the CFPB is funded independently.

"They better think twice about undermining financial reform," Warren said. "Working families want a strong consumer agency and they want tough rules on Wall Street."

Warren sought to rally advocates by describing how tough it was to initially gain support for the CFPB. The former Harvard law professor first proposed the idea of a consumer product safety commission in 2007.

"The other guys were spending more than $1 million a day fighting against tough Wall Street rules and it wasn't enough to overcome our voices," Warren told supporters. "We won against terrible odds and we didn't win because we had lots of money to spend."

She even suggested the need for regulatory changes.

"We ended up with Dodd-Frank. It isn't perfect," Warren said. "It moved us a big step in the right direction."

Many advocacy groups from Consumers Union to the AFL-CIO, from U.S. PIRG to the National Consumer Law Center, are expected "to raise all kinds of hell," in support of the CFPB, said Jim Lardner, a spokesman for Americans for Financial Reform.

One strategy is to test if the Trump administration and Congressional Republicans are prepared to go to battle over the agency.

Progressives plan to flood Congressional offices with demands to defend the CFPB and Dodd-Frank just as various constituencies targeted House Republicans last week when they sought to gut the little-known Office of Congressional Ethics.

"They had better start thinking how this could play out much like the attack on the House ethics office, and turn into a political and public relations disaster," Lardner said.

For reprint and licensing requests for this article, click here.
Compliance Dodd-Frank Originations