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Top Republicans on the House Financial Services Committee clashed with Elizabeth Warren, who is leading the Consumer Financial Protection Bureau creation, over her role in the mortgage servicer settlement.
March 30 -
In a letter to House Financial Services Committee Chairman Spencer Bachus, Geithner said the Consumer Financial Protection Bureau is providing advice to the settlement process because the agency will eventually be in charge of writing new servicing rules.
March 15
Elizabeth Warren, the Obama administration official in charge of setting up the Consumer Financial Protection Bureau, again defended her role in a pending settlement between several state and federal agencies and the top 5 mortgage servicers.
Warren sent a letter to House Financial Services Committee Chairman Spencer Bachus on Monday responding to complaints he made that she went further than simply providing advice. In the letter, Warren maintained that she has only provided advice.
"We have provided advice to federal and state officials regarding potential servicing settlement," Warren wrote. "In doing so, we have been an active participant in inter-agency discussions, sharing our analysis and recommendations in support of a resolution that would hold accountable any servicers that violated the law. As I explained during the recent hearing, because this is an ongoing law enforcement matter, it would be inappropriate for me to disclose the contents of these inter-agency discussions. While we have provided advice to government officials, it bears emphasizing that the consumer agency is not conducting settlement negotiations with mortgage servicers."
At a March 16 hearing of the House Financial Services financial institutions subcommittee, Republican lawmakers blasted Warren for her involvement in the settlement process. At the hearing, Warren argued that her role was simply to provide advice when asked.
But disclosures of meetings between Warren and settlement officials and the leak of a document titled, "Perspectives on Settlement Alternatives in Mortgage Servicing," in which CFPB lobbied Iowa Attorney General Tom Miller for a $20 billion fine against the banks have led Republicans to contend that Warren's role has been too extensive.
In Monday's letter, Warren said CFPB was asked by Treasury Secretary Tim Geithner, the Justice Department and other federal officials to provide assistance to the settlement process.
"To the extent that we can be helpful in holding to account servicers that have violated the law and in repairing the damage they caused, we are proud to do so," Warren wrote. "The consumer agency was designed to be a voice for American families, and we are willing to speak on their behalf."
