By Douglas Gillison
WASHINGTON, July 15 (Reuters) – Russell Vought, President Donald Trump’s outgoing interim consumer finance watchdog, on Wednesday sparred with congressional Democrats over his administration’s handling of the U.S. Consumer Financial Protection Bureau, telling lawmakers efforts to sharply shrink the agency in fact helped eliminate economic burdens.
Vought’s testimony in a sometimes raucous hearing before the House Financial Services Committee came two weeks before he is due to step down after serving for a year and a half in an acting capacity during which he has sought to fire most agency staff, rescind regulations in bulk and halt much of the agency’s regular activity.
Vought faced supportive questions from the committee’s Republicans, who said Vought had appropriately changed policy directions for an agency they accused of politicized enforcement and burdening free enterprise.
Trump last month nominated current Capital One executive Brian Johnson, a former top CFPB official, to replace Vought as CFPB director.
“Sir, I am glad you are leaving,” New York Democrat Gregory Meeks told Vought, alleging that he had flouted the laws establishing the agency. The committee’s top Democrat, Maxine Waters, told Vought that he should prepare for further scrutiny from lawmakers.
“Let me be clear, we are not done with you,” she said. Should Democrats regain the majority in November’s midterm elections, they would have the power to formally investigate Vought’s actions at the agency.
Congress created the CFPB following the 2008 financial crash to prevent predatory lending and police financial products that underpinned the global financial crisis.
Vought, who is also the White House budget director, cited research published this year by the White House Council of Economic Advisers, which asserted that the CFPB’s regulatory actions actually imposed costs on consumers of hundreds of billions of dollars, by raising costs and reducing access to credit. Consumer advocates and experts have strongly disputed the report’s methods and conclusions, however.
In testimony, Vought described the agency as invasive and outside the oversight of Congress.
“When you have a financial regulatory entity that views themselves as a prosecutor, an advocate, and they have the tools of the civil investigative demand…you have great opportunities for mischief,” he said.
Representative Andy Barr, the top Republican on the subcommittee for financial institutions, compared CFPB regulatory enforcement activity to “Gestapo tactics,” referring to Nazi secret police, that he claimed had bankrupted law-abiding companies.
In a statement following the hearing, a Barr spokesperson did not directly address the Gestapo comparison, saying the CFPB had “crushed consumers — the very people it was supposedly created to protect — by waging war” on industries that provide consumer credit.
(Reporting by Douglas Gillison in Washington; Editing by Andrea Ricci )
