Handing CFPB to appropriators would set ‘dangerous precedent,’ Warren says

“Families can and should be proud of their new watchdog, but they would be wrong if they take its future security and independence for granted,” she will say in a speech to the Consumers Union, according to her prepared remarks.

Specifically, she will warn against efforts to bring the CFPB’s budget under the jurisdiction of Congressional appropriators. Several Republicans, critical of the bureau, have contended that the office suffers from a lack of Congressional oversight because its budget falls outside the appropriations process. Instead, the CFPB receives its funding as part of the Federal Reserve’s budget.

“Many of those who have opposed the CFPB are still trying to chip away at its independence by subjecting it entirely to Congressional appropriations without any dedicated funding from the Federal Reserve,” she will say. “Politicizing the funding of bank supervision would be a dangerous precedent, and it would deprive the CFPB of the predictable funding it will need to examine large and powerful banks consistently and to provide a level playing field with their nonbank competitors.”

She will also detail her vision for the CFPB, detailing how she wants it to push for clear explanations of consumer financial products that allow consumers to readily comparison shop.

“Too many profit models have been built around keeping customers confused or uncertain, pretending to sell at one price on the front end and knowing that the real profits will be made on fees, penalties and re-pricing on the back end … All this was a way to boost profits by avoiding head-to-head competition on features that customers could easily understand,” she will say. “We believe in comparison shopping. We want the price and the risks to be clearer, so that consumers can see what is being offered and decide the products that are best for them.”

The CFPB, which is still under construction, begins its work in July, one year after Dodd-Frank was enacted.