Bearing olive branch, Warren braves Chamber

By Kevin Drawbaugh

WASHINGTON (Reuters) – Elizabeth Warren went before some of her sharpest critics on Wednesday to defend the independent funding of the U.S. financial consumer watchdog agency she is setting up for the Obama administration.

At a U.S. Chamber of Commerce event attended by scores of financial industry lobbyists keen to rein in her agency, Warren said she is a strong supporter of business competition and that she believes she has that in common with the chamber.

“I know that you believe in it passionately and so do I,” she said in the chamber’s chandeliered Hall of Flags in its headquarters near the White House. The chamber is the nation’s largest and richest business lobbying group.

“The chamber and I have not always seen eye to eye … But I don’t consider myself in hostile territory right now, and that is because I believe we share this principle,” she said.

Her appearance at the event was the latest stop in her charm campaign as the administration weighs whether to formally nominate her to be director of the Consumer Financial Protection Bureau (CFPB) created by 2010’s Dodd-Frank reforms.

President Barack Obama has done more recently to reach out to business, after a testy first two years in power, but the chamber has remained a foe, analysts said.

“The chamber has been very aggressive in opposing pretty much any policy the Obama administration has proposed,” said Christian Weller, an associate professor of public policy at the University of Massachusetts-Boston.

“These attacks on the administration and its policies are very surprising considering that the Obama administration has gone out of its way to make sure that its policies will in fact enhance the functioning of private markets,” he said.


Warren used the chamber event to attack a proposal from congressional Republicans to put the CFPB’s funding through the congressional appropriations process, instead of getting funds independently as the Dodd-Frank legislation required.

CFPB funding should be independent of the appropriations process, she said, as it is for other bank regulators.

“A new restriction has been proposed to subject the consumer bureau to the yearly appropriations process. Not one other banking regulator — not one — is subject to appropriations,” she said.

“There is no principled reason for breaking from this historical practice and for stripping the independence of the first banking agency devoted to consumer protection,” said Warren, a Harvard Law School professor.

Jamie Dimon, CEO of banking giant JPMorgan Chase & Co, spoke at the event later on Wednesday. Senior White House economic adviser Gene Sperling was also due to appear.

Dimon said corporate America was in good shape with consumer spending up and housing improving. But he cautioned about the impact of Dodd-Frank, saying it posed huge costs for banks.

Chamber President Thomas Donohue, speaking at the event, said Dodd-Frank threatens a “steady decline in our share of global economic activity … We’re in a dangerous position.”

The chamber wants the CFPB to have a five-member bipartisan board, rather than a single director, he said, adding that another top priority is protecting end-users of financial derivatives from costly new Dodd-Frank margin requirements.

Donohue also urged “caution” on a central part of Dodd-Frank — tagging large financial institutions as potential risks to the financial system so they can be more tightly policed by regulators. The goal is to prevent a repeat of the crisis that pulled the economy into a deep recession.

(Reporting by Kevin Drawbaugh; Editing by Matthew Lewis and Tim Dobbyn)

Bearing olive branch, Warren braves Chamber