An epic throwdown happened Thursday on Capitol Hill over the role of the federal government. The topic: the Consumer Financial Protection Bureau, the agency created in the wake of the financial crisis.
On one side was the Trump administration's acting director, Mick Mulvaney, who believes the bureau's powers are excessive and unchecked. On the other was Sen. Elizabeth Warren, D-Mass., who led the creation of the bureau to protect consumers from abuses by everything from big banks to student loans to fly-by-night loan sharks.
Mulvaney, Trump's appointee, calls the bureau Warren's "baby." But Democrats say that over the past five months, he has done a terrible job of taking care of it.
Back when he was a Republican congressman, Mulvaney sponsored legislation to abolish the bureau and called it a "sick, sad" joke.
In Thursday's hearing of the Senate Banking Committee, Warren fixed her intense stare on Mulvaney.
"I want to take a look at what would have happened if you had gotten your wish and the CFPB had been abolished," she said. Since its creation, the bureau has returned a total of $12 billion to consumers by clawing back money from companies that cheated them. The people who benefited, Warren says, included seniors, students and active-duty military.
"Here's what you don't get, Mr. Mulvaney. This isn't about me. This is about about active-duty military. It's about first responders and students and seniors and families ... and millions of other people who need someone on their side when consumers get cheated," Warren said.
She added: "You are hurting real people to score cheap political points."
Thursday's hearing is part of Mulvaney's mandated semiannual report to Congress on the activities of the CFPB. This is his second of back-to-back sessions.
In a hearing of the House Financial Services Committee on Wednesday, New York Democrat Carolyn Maloney said the bureau used to bring several enforcement actions a month against financial companies. She pressed Mulvaney:
Maloney: "So let me ask you how many enforcement actions has the bureau initiated since you took over?"
Mulvaney: "We have initiated none since I've been there."
Maloney: "So it's zero."
Mulvaney said he is bringing a less aggressive approach. His vision for the CFPB is one that is run with more humility and prudence. Maloney asked him, "Does your new approach involve bringing any actual enforcement actions?"
Mulvaney countered that there were 100 active investigations and 25 ongoing lawsuits, though he acknowledged that the suits were initiated under the previous Obama-era director.
Mulvaney insisted that he is enforcing the law. About the bureau itself, he said: "I have not burnt the place down."
But Mulvaney said repeatedly he thinks the bureau is far too independent and powerful. Congress doesn't control its spending — it gets its money from the Federal Reserve. As Mulvaney told Republican Sen. Richard Shelby:
Mulvaney: "I could walk down to the Federal Reserve on Oct. 1st this year, Senator. If I ask for it — and I don't have to tell you what I'm going to do with it."
Shelby: "Basically we've had no oversight of this agency."
Mulvaney: "I have to come here twice a year and that's about it."
He is asking lawmakers to put the bureau's budget under the control of Congress, place the director under the authority of the president and to require that lawmakers vote to pass any new rules the bureau creates.
Democrats and consumer advocates say that would put the consumer watchdog agency on a very short leash. In the wake of the financial crisis, Warren and others designed the bureau to be a strong, independent agency to protect consumers. It is funded by the Federal Reserve instead of by Congress, a move designed to shield it from political influence. But many Republicans argue the bureau's power is unchecked.
"So powerful is the CFPB director that he alone has been granted the unprecedented power to declare any mortgage credit card or bank account unfair or abusive at which point Americans can't have them," said House committee Chairman Jeb Hensarling, R-Texas.
Under Mulvaney's watch, the CFPB has dropped an investigation into a payday lender and announced that it will reconsider a rule to put stricter limits on companies that make high-interest, short-term loans. Consumer groups point to campaign contributions Mulvaney received from payday lenders when he was in Congress and say he is doing the industry's bidding. Mulvaney has said the campaign contributions do not constitute a conflict of interest.