Banking/Financial Institutions

Republicans want Warren to clarify her role in mortgage settlement talks

“When political appointees involve themselves in enforcement matters, they may pressure regulatory officials to take actions benefiting a particular political constituency or advancing a particular agenda at the expense of sound policy,” the lawmakers wrote in Wednesday’s letter.

Warren said in her testimony that she and CFPB staff simply offered advice and expertise when asked by administration officials involved in the talks. 

But Bachus and Capito now believe Warren underplayed the role of the agency in the talks, citing a confidential presentation drafted by CFPB staff.

The lawmakers argue that the presentation, included with the letter, prove that Warren and the CFPB had “extensive involvement” in the negotiations, perhaps even going so far as to recommend how much firms should have to pay under the settlement.

They singled out one slide of the presentation that said rough estimates suggest that servicers may have saved more than $20 billion by cutting corners in mortgage servicing practices.

“Not coincidentally, it seems, it has been widely reported that the Department of Justice and state Attorneys General are now seeking at least $20 billion in such penalties,” they wrote. “It is plain that the CFPB has done more than provide ‘advice’ on the proposed servicing settlement,” they wrote.

The lawmakers also attached a copy of Warren’s testimony to the letter, asking her if there were any areas she wanted to clarify.

A spokesperson for the CFPB maintained Wednesday that Warren was accurate in her characterization.

“As Elizabeth Warren testified to Congress earlier this month, the consumer bureau provided advice to various officials involved in the mortgage servicing law enforcement matter.  She is aware that not everyone agrees with that advice or how to address the serious deficiencies at some of the nation’s largest mortgage servicing firms,” said Jen Howard, senior spokesperson for the CFPB.

This post updated at 3:29 pm.

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