Two top leaders of the government’s newest consumer protection agency received very different receptions on Capitol Hill this week. Raj Date, interim leader of the Consumer Financial Protection Bureau, was grilled by a panel of Republicans on the House Financial Services Committee on a range issues, including allegations that the new agency has too much power and could hurt small banks and credit unions.
“It could easily become a loose cannon,” Rep. Spencer Bachus, R-AL, the committee’s chairman, said during the hearing. “That would be the worst case scenario, and it may not, but it’s headed by a single director who answers to no one.”
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The Republican argument that the bureau has few effective checks and balances is not a new one, and neither is the Democratic response that the bureau has plenty of limits on its authority.
“I look forward to many more hearings that denounce lack of oversight while we are overseeing this agency,” Rep. Barney Frank, D-Mass, said sarcastically.
Meanwhile, at Thursday’s hearing of the Senate Banking Committee, the tone between Republicans, Democrats and bureau leaders was far more civil. That’s because the subject of the hearing was preventing financial abuses against members of the military, a cause supported by both parties.
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“While often there appears to be very little upon which our respective sides can agree, there is complete agreement, I think, on our joint commitment to supporting our men and women in uniform,” Sen. Richard Shelby, R-AL, the committee’s ranking Republican, said before testimony started.
The featured speaker at the hearing was Holly Petraeus, who grew up in a military family, is married to former Army leader and current CIA director David Petraeus and who is now assistant director of the bureau’s office of servicemember affairs. Petraeus outlined the major objectives for her office, which include helping members of the military avoid foreclosure, for-profit college scams and the age-old scourge of predatory car dealers.
“Military personnel love their wheels, and they don’t always go shopping for them in the right places,” Petraeus told the panel. “Although the CFPB will only have supervisory authority over the auto dealers who write their own loans (what are often called “buy here-pay here”), the Federal Trade Commission and the Federal Reserve are required by Dodd-Frank to coordinate with us on military auto issues, and we have already started to do that.”
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Image: Consumer Financial Protection Bureau, via Flickr.com