Elizabeth Warren defends Consumer Bureau’s role in settlement talks

The letter comes in response to accusations from Republicans that Warren downplayed the role the CFPB had played in settlement talks when she testified before the House Financial Services Committee on March 16.

There, she told lawmakers that the CFPB had offered advice and expertise to other officials when asked. Republicans pressed Warren on the issue, arguing it would be inappropriate for the CFPB to play a role in settlement talks, since the agency does not officially begin work until July and Warren is a political adviser — an appointed director.

In a March 30 letter, Finance Chairman Spencer Bachus (R-Ala.) and Rep. Shelley Moore Capito (R-W.Va.) pointed to a previously confidential presentation put together by CFPB staff regarding mortgage documentation problems and settlement talks as proof the agency had “extensive involvement” in the negotiations. They invited her to revise her testimony before the committee.

In her response, however, Warren did no such thing, defending the agency’s role as an “active participant” in inter-agency discussions about the settlement. She declined to detail those talks, citing the ongoing law enforcement matter, and emphasized that the Department of Justice, other federal agencies, and state attorneys general are the ones negotiating directly with servicers, not the CFPB.

When the CFPB begins official work in July, it will be authorized to regulate mortgage servicing. As a result, the agency has brought on staff with relevant expertise, which Warren argued made the bureau a valid resource to tap for the Treasury Department and other officials involved in settlement talks.

“Let me make it clear that every step we have taken has been mindful of the impact of these deficiencies on countless American families, their neighbors, their communities, and the economy as a whole,” she wrote. “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.”