CFPB has no plan to ban financial products, Warren tells GOP-led committee

Introduction

The new Consumer Financial Protection Bureau, which opens for business next week, does not plan to ban specific financial products, presidential adviser Elizabeth Warren told Congress.

Banning fraudulent financial products and services “is a tool in the toolbox, and that’s where it should stay,” Warren testified at a Republican-led House Oversight and Government Reform hearing on Thursday, the Wall Street Journal, Politico and other media reported. “We have no present intention to ban a product, but we are still learning about what’s out there” she said.

Republicans on the panel, who questioned Warren at a contentious hearing in late May, grilled Warren about whether the CFPB may try to outlaw payday loans and try to regulate new car loans.

“The American people have a right to know how the bureau will advance and enforce its regulatory assignment,” said Committee Chairman Darrell Issa, a California Republican. “Consumers deserve opportunities to choose between lending alternatives and other financial tools that establish credit and give buyers the chance for affordable enhancements to their standards of living.”

A C-span video of the three and one-half hour hearing is posted here.

Banks push to weaken derivatives rules – In a potential win for big banks, federal regulators are considering a weaker version of a plan that initially sought to limit a big bank from controlling more than 20 percent of any one derivatives exchange.

The Commodity Futures Trading Commission is now privately discussing a lower cap after aggressive lobbying by Wall Street, the New York Times Dealbook reports. How aggressive? CFTC officials have held almost 50 private meetings with players including mega-banks such as Goldman Sachs Group Inc. and Morgan Stanley.

New financial data office – A new Treasury Department office tasked with collecting data from banks, hedge funds and brokerages is yet another example of government overreach and a likely target for hackers, Republicans warned Thursday at a House hearing.

The Office of Financial Research was created by the Dodd-Frank reform law with the power to collect and analyze company-specific data to help regulators pinpoint systemic risks to the economy.

The new office “has very broad power and authority with very few checks and balances,” said Texas Republican Randy Nuegebauer . “There is no limit to the information you can require from a company.”

Oil payment rules – Human rights groups urged the Securities and Exchange Commission to hurry up and finalize an energy industry anti-corruption rule that was tucked into the Dodd-Frank law.

The proposed SEC rule would force oil, natural gas and other energy companies listed on U.S. stock exchanges to disclose exactly how much each pays to overseas governments to acquire drilling and production rights. Energy companies have fought the SEC plan, saying the requirement would be overly burdensome and costly.