Elizabeth Warren, the Democratic candidate for Senate from Massachusetts, said the U.S. Consumer Financial Protection Bureau’s first enforcement action, announced last week against Capital One Financial Corp. (COF:US), should serve as a warning to other credit-card issuers.
“It’s not just the impact on Capital One, it’s the impact on the whole industry,” Warren said in a telephone interview. “The other credit card issuers have got to be looking around saying ‘Here’s an agency that is serious’.”
Warren, often credited with helping conceive the consumer bureau established as part of the Dodd-Frank law of 2010, helped set up the agency as an adviser to President Barack Obama. Obama ultimately passed her over as its first director in favor of Richard Cordray, a former Ohio attorney general.
Warren said that the bureau’s first settlement, which totaled $210 million in partnership with the Office of the Comptroller of the Currency, went against the conventional wisdom in Washington.
“If you’ve never done something before, the advice is always ‘Do something at the margin. There won’t be controversy’,” Warren said. “There is nothing namby-pamby about what they did.”
Warren said the outcome vindicates her effort to ensure that the bureau had broad powers, including supervision and enforcement, so that it could identify a problem and pursue it to settlement.
“The agency has all the tools and it is starting to use them together to have more impact,” Warren said. “It’s exciting to watch this happen.”
Warren criticized Republicans for continuing to push legislation that would restructure the agency and impose restrictions on its funding. Scott Brown, the Republican senator from Massachusetts who is her opponent, was one of three Republican senators to vote in favor of Dodd-Frank.
“Republicans are trying to make this agency less independent,” she said. “They want to keep it on a short political leash.”
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