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Consumer agency is banking cop for American families, says Sen. Warren

Sen. Elizabeth Warren, D-Mass., says the law is clear when it comes to who should run the Consumer Financial Protection Bureau in the wake of the resignation of its director. Warren, who helped create the bureau under the Obama administration, talks with William Brangham about the mission and the independency of the agency, as well as President Trump’s latest disparaging remark.

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  • William Brangham:

    At the Consumer Financial Protection Bureau today, a simple question: Who's the boss? The answer, it turns out, is not so simple.

    Protesters opposing President Trump, and supporting the CFPB, turned out this morning. While the president's choice as interim director, White House Budget Chief Mick Mulvaney, brought donuts, his rival, Leandra English, e-mailed Thanksgiving wishes and met with Senate Democratic leaders.

    On Friday, outgoing Director Richard Cordray tapped English, his chief of staff, to temporarily fill his shoes. But, within hours, the president tapped Mulvaney, who, today, directed employees to disregard any further instructions from English.

    He also announced a 30-day freeze on hiring and new rule-making.

  • Mick Mulvaney:

    I'm just learning about the powers that I have as acting director. They would frighten most of you. They would probably worry you to think about how little oversight Congress has over me.

  • William Brangham:

    But English maintains she has the legal authority to lead under the Dodd-Frank Act. That's the law that created the bureau.

    She filed a federal lawsuit Sunday night seeking to bar Mulvaney from assuming the post. The White House cites the Federal Vacancies Reform Act, which allows the president to fill openings.

  • White House Press Secretary Sarah Sanders:

  • Sarah Huckabee Sanders:

    I think that the legal outline shows very clearly who is in charge of that agency, and both he and the White House, as well as the general counsel for CFPB, says that he has the legal standing to be there and serve as the director.

  • William Brangham:

    The CFPB was formed in 2011 as part of the response to the 2008 financial crisis. Its mission is to oversee financial institutions, to encourage them to make less risky decisions, and to safeguard consumers from financial fraud.

    Big banks and conservatives have long maligned the CFPB for being too powerful and lacking oversight.

    On Saturday, the president tweeted the CFPB — quote — "has been a total disaster. Financial institutions have been devastated and unable to properly serve the public."

    Mulvaney himself has echoed those criticisms, as he did in this 2014 interview when he was a South Carolina congressman.

  • Mick Mulvaney:

    It turns up being a joke, and that's what the CFPB really has been, in a sick, sad kind of way, because you have got an institution that has tremendous authority over what you all do for a living.

  • William Brangham:

    Democrats insist the bureau is essential to avoid another financial crisis and subsequent recession. It was originally proposed by now-Democratic Senator Elizabeth Warren of Massachusetts, who helped organize the bureau under the Obama administration.

    We asked Mick Mulvaney for an interview, but we didn't get a response.

    I spoke with Senator Warren earlier today about the CFPB's current power struggle.

    And I started by asking her who should be running the bureau.

  • Senator Elizabeth Warren:

    Well, Congress said, in the language that was signed into law, that when the director is unavailable — that would be Rich Cordray, who has just resigned — the deputy director — that would be Leandra English — becomes the acting director, no gap, no appointment. It just happens by virtue of the law that Congress wrote, and that's it.

    So, Leandra English is acting director. That's how the statute reads.

  • William Brangham:

    I know you say that the language is crystal clear, but the lawyers at the CFPB themselves said, no, that the president has this authority and thus Mick Mulvaney ought to be the acting director. Why do you think that those lawyers, who are not Trump appointees, have it wrong?

  • Senator Elizabeth Warren:

    So, the alternative is to use the Vacancies Act. That's what it is that the Trump administration is using.

    And the Vacancies Act says that the president can appoint temporarily for these vacancies. But there are two problems with that. The first is the Vacancies Act itself says — it was passed decades ago — it applies only to agencies that were already set up at the time the law was passed.

    And going forward, it applies, in effect, as a default, that is, if Congress doesn't otherwise provide for succession. What happened over at the CFPB is that Congress did provide for succession. In fact, how do we know that? It turns out that in an earlier draft of the consumer agency, it actually said that they would use the Vacancies Act, which means the president would be able to appoint someone.

    And then Congress decided, nah, no, we're not going to do it that way because we want more independence from political influence. The only political influence that the president of the United States should have over this agency, according to the law, is to nominate someone to head it.

    And then the Senate has to step up and decide whether or not to confirm that person. Otherwise, this agency, like the other banking agencies, is supposed to operate independently.

    I recognize that there are lawyers all around every part of this. That's why the thing is in court right now. I think the language of Dodd-Frank is pretty clear. So does Barney Frank, who wrote it. So does Chuck Schumer, who also helped write it. But it will go to the courts now.

  • William Brangham:

    Apart from this fight over who actually runs it, it seems that your bigger disagreement is that Mick Mulvaney and the Trump administration wants to change the essential function of the agency.

  • Senator Elizabeth Warren:


    Well, this agency was put in place after the 2008 crash, and all of us remember what led up to that crash. All of the mortgage lenders and giant banks that had pumped out the terrible mortgages that were, in effect, like grenades with the pins pulled out, and those grenades blew up families all across this country.

    Millions of people lost their homes. Millions of people lost their jobs. Millions of people lost their savings and their pensions.

    And when we hit that crash, we said never again. Big banks, Wall Street banks, they may figure out other ways to blow up the economy, but they're never going to do it one family at a time, the way they did leading up to the crisis of 2008.

    And so Congress put in place the consumer agency to say, you guys have to follow the laws. And it cannot be the case that you can get out there and sell mortgages to people that you know are going to cost them their homes. You can't trick and trap people in the fine print of their credit card accounts.

    Or, just to pick a recent example, you can't open fake accounts in order to boost profits. That was Wells Fargo. And that's what the agency does. It writes some regulations. It handles complaints. It's handled about 1.2 million complaints so far. It enforces the law on behalf of consumers, forcing the big banks to return more than $12 billion directly to families they have cheated.

    It's the cop on the beat for American families.

  • William Brangham:

    I mean, the White House has been issuing what they argue are instances of overreach, unaccountable overreach.

    They said that the bureau, the agency made auto loans harder to get. They said it opened up small community banks to frivolous lawsuits. Do you think that there is any evidence of overreach at the bureau?

  • Senator Elizabeth Warren:

    You know, this is a really tough one.

    The auto lenders got an exception from the Consumer Financial Protection Bureau oversight. And there have been some real problems in that area. That's an area where the little part that got carved out has had a lot more difficulty than the rest of the banking system.

    But, you know, that's really the question for me. Where is the overreach that the White House wants to talk about and are the Republican talking points? Was it overreach to go after Wells Fargo? Overreach to go after the credit card companies that tacked on fees that people didn't owe? Overreach to go after the student loan companies that overcharged on interest and fees for student borrowers?

    You know, I haven't seen any specific examples around this. What I see is an agency that's out there working on behalf of American families, and what I also see are very powerful Wall Street banks who don't like that. They have about 12 billion reasons not to like it.

  • William Brangham:

    Lastly, Senator, earlier today, President Trump had a ceremony honoring Navajo code talkers, again derisively referred to you as Pocahontas.

    Do you have any response to the president's comments?

  • Senator Elizabeth Warren:

    You know, this was supposed to be a ceremony honoring Native Americans who had done incredible work on behalf of the United States, that had saved countless lives both of people in the United States and people, our allies around the world.

    This was a moment to honor them, to honor their heroism. And Donald Trump just couldn't make it through without adding a racist slur to the event.

    You know, I know he thinks that somehow doing that is going to shut me up, but it hasn't worked in the past, and it's sure not going to work in the future.

  • William Brangham:

    All right, Senator Elizabeth Warren of Massachusetts, thank you very much.

  • Senator Elizabeth Warren:

    You bet.

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