GOP Rep. Neugebauer wants ‘clear picture’ of Warren’s intentions for consumer bureau

Although he had kind words for Warren herself, praising her in a Jan. 18 letter for her “professionalism and enthusiasm,” Neugebauer, who chairs the Oversight subcommittee of the House Financial Services Committee, nonetheless contended that her work at the CFPB is part of a “fatally flawed plan.” 

While Warren has said she wants the new bureau to push for plain language in financial documents for consumers, GOP members have warned the organization could overreach and stifle financial markets.

Coupled with other new provisions being enacted under the Dodd-Frank law, Neugebauer warned of serious unintended consequences of the law that could drive up costs for consumers.

“When you look at what’s going on right now, [it] is a huge attack on the business model of these financial institutions,” he said. “Their shareholders are expecting profits, and so you’re going just to increase the costs of a lot of these financial services.”

After meeting with the Harvard law professor on Jan. 4, Neugebauer said he was left wanting more information about several aspects of the CFPB’s operations, including its plans for staffing, budget and efforts to work with other regulators.

For example, citing reports that the CFPB could be hiring as many as 1,000 people, Neugebauer asked for detailed information about the staffing effort, including the salary range of prospective and current employees and procedures for reporting potential conflicts of interest, as well as when a permanent CFPB director might be named.

Neugebauer told The Hill he was particularly concerned that the CFPB was hiring staff without a permanent director in place.

“The person who’s going to be in charge of running that organization should be making those decisions,” he said.

He also wondered about Warren’s unique position and what it entails. Officially dubbed the assistant to the president and special adviser to the secretary of the Treasury, Warren is not the official director of the nascent CFPB, since none exists, and recent reports indicate that she might not fill the position once the bureau is established. Neugebauer said it was unclear what exact responsibilities and authority Warren had in her current capacity.

Neugebauer also expressed skepticism about the CFPB’s funding. The Dodd-Frank Act that created the bureau authorized $200 million annually from fiscal 2010 through 2014, with the added ability to tap another $400 million a year from the Federal Reserve. Neugebauer asked for a detailed budget plan for the bureau, and expressed his concern that its funds are not distributed via the traditional appropriations process.

He asked if Warren and her staff would be willing to draft legislative language that would bring the CFPB’s budget under the purview of congressional appropriators.

Neugebauer gave Warren until Jan. 31 to respond to his queries.