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ICYMI: WSJ: Elizabeth Warren Forgets


Washington, Jul 21 -

The kind of agency the Harvard professor was for before she was against it.

In the hyperbole department, does anyone do it better than Elizabeth Warren? Yesterday she told reporters that today's House vote on a Consumer Financial Protection Bureau reform bill is an effort to "try and kill this agency." Little did we know that accountability and murder were synonymous in the Harvard law professor's vocabulary.

 

The Consumer Financial Protection Safety and Soundness Improvement Act of 2011, sponsored by Wisconsin Republican Sean Duffy, would delay the transfer of powers to the bureau until it has a Senate-confirmed director. The bill would also lower the threshold for overturning bureau rules, establish a five-member commission at the agency's head, and make it easier for the Financial Stability Oversight Council (a creature of Dodd-Frank chaired by the Treasury Secretary) to ensure that bureau rules don't threaten the safety and soundness of America's financial system.

The bill doesn't address the bureau's biggest problem, which is that its funding is set by its director and not subject to Congressional oversight. But the other reforms are a good start.

 

Once upon a time, Mrs. Warren might have even agreed with Mr. Duffy. Writing in the journal Democracy in 2007, she called for a Financial Product Safety Commission (our italics), modeled after the Consumer Product Safety Commission. The latter has a five-member, bipartisan board and is subject to Congressional appropriations. Several Congressional Democrats introduced bills modeled on Mrs. Warren's idea. Barney Frank's would have created an agency headed by a five-member board and subject to Congressional appropriations. The final law created a single bureau director and nixed Congressional funding oversight.

 

So why are Democrats up in arms now? Probably because Republicans now run the House, making an unaccountable federal agency that much more valuable to Mrs. Warren's liberal ambitions. We get the politics at work here, and the bill will die in the Senate. But we thought our readers ought to know what kind of agency Mrs. Warren and the Democrats were for before they were against it.