By Jeff Bater
Sept. 21 — The Consumer Financial Protection Bureau has become a campaign issue in a close U.S. Senate race in Pennsylvania, where Democrats are questioning incumbent Pat Toomey's commitment to consumers amid the Wells Fargo crackdown.
Democratic challenger Katie McGinty joined Sen. Elizabeth Warren (D-Mass.), who is a champion of the embattled agency, on a media call Sept. 21 criticizing Toomey, a member of the Senate Banking Committee.
Toomey sharply questioned Wells Fargo CEO John Stumpf at a Sept. 20 committee hearing examining revelations that bank employees secretly opened more than 2 million unauthorized accounts to hit sales targets, which prompted $185 million in fines from the CFPB, the Office of the Comptroller of the Currency and the city of Los Angeles.
Toomey attacked the company's sales culture and accused the financial giant of fraud, but Warren and McGinty questioned his commitment to consumers, noting he has supported legislation that would curb the CFPB’s independence.
“Pat Toomey makes a big show of criticizing a horse thief while he tries to fire the sheriff for doing his job. Just how does Pat Toomey plan to prevent massive bank fraud like Wells Fargo when he's trying to pull the ‘P' out of the CFPB,” Warren told reporters.
Toomey co-sponsored legislation (S. 1383) introduced last year by Sen. David Purdue (R-Ga.) that would bring the CFPB under the annual congressional appropriations process. Currently, the bureau receives direct funding from the Federal Reserve. Purdue introduced a similar bill (S. 3318) on Sept. 13.
Toomey's office released an e-mailed statement to Bloomberg BNA after the McGinty-Warren media call, saying he “believes that the guilty employees and negligent management should be held accountable.”
“But let’s be clear. CFPB did not discover the wrongdoing by Wells Fargo,” the Toomey statement said.
“Unlike the OCC and the L.A. City Attorney, the CFPB continues to refuse to provide evidence that it played any role in unearthing or cleaning up the mess other than collecting the $100 million fine from the bank – not a penny of which the CFPB will give to the victims,” Toomey’s statement said.
If poll numbers are any indication, Toomey is in the middle of a tough re-election battle. A Morning Call/Muhlenberg College poll released Sept. 17 showed McGinty, a former Clinton administration and Pennsylvania state environmental official, ahead of Toomey, 43 percent to 38 percent.
At the national level, Democratic presidential nominee Hillary Clinton defended the CFPB in an open letter Sept. 20 on Wells Fargo, in which she said, “I’ll protect the CFPB and make sure it can continue its essential work on behalf of the American people.”
Democrats and Republicans will have a chance to spar over Wells Fargo and the CFPB next week.
The House Financial Services Committee plans to hold its hearing on the scandal Sept. 29. Stumpf has been invited to testify — and the hearing will also discuss settlement agreements with the Los Angeles city attorney and federal regulators.
“We recognize that his (Stumpf's) Senate hearing was hostile,” Cowen and Company analyst Jaret Seiberg wrote in a note. “The House hearing could be even tougher. As a general rule, House members are more vocal and more radical. There will be multiple lawmakers who subject Stumpf to Elizabeth Warren-like cross examinations.”
To contact the reporter on this story: Jeff Bater in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Mike Ferullo in Washington at email@example.com
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)