WEBVTT - Sen. Elizabeth Warren (D) MA Talks Fed 0:00:02.360 --> 0:00:07.040 Bloomberg Audio Studios, podcasts, radio news. 0:00:06.840 --> 0:00:08.920 And joining us now for more live from Capitol Hill 0:00:09.080 --> 0:00:11.600 is Senator Warren, who of course is ranking member of 0:00:11.640 --> 0:00:15.080 the Senate Banking Committee. Senator, welcome back to Bloomberg TV 0:00:15.240 --> 0:00:17.520 and Radio. We do have many questions for you about 0:00:17.520 --> 0:00:21.319 what's happening with the CFPB specifically, but we also saw 0:00:21.360 --> 0:00:24.840 today as you and your colleagues pressed the chairman repeatedly 0:00:25.239 --> 0:00:29.479 about the influence this administration's policies like tariffs, are going 0:00:29.480 --> 0:00:34.040 to have on monetary policy. When we are considering policies 0:00:34.040 --> 0:00:37.720 that could potentially be inflationary, do you see justification here 0:00:37.720 --> 0:00:40.600 for the Fed to even be thinking about cutting rates? 0:00:41.680 --> 0:00:45.560 So, Lord, I press the Fed to lower interest rates 0:00:45.600 --> 0:00:48.240 because I want families to be able to have cheaper 0:00:48.280 --> 0:00:50.760 mortgages and to be able to pay off their credit 0:00:50.800 --> 0:00:56.360 card debts. But I truly understand the hesitancy that the 0:00:56.400 --> 0:01:01.040 Fed chair expressed today because we live the world of 0:01:01.480 --> 0:01:05.679 on again, off again tariffs that Donald Trump has put 0:01:05.720 --> 0:01:09.360 in place and taken out of place. Don Trump's on again, 0:01:09.560 --> 0:01:15.039 off again firing tens of thousands of federal workers, his 0:01:15.400 --> 0:01:18.680 on again, off again Whether or not we're going to 0:01:18.720 --> 0:01:24.720 have federal contracts honored to sell wheat and other commodities 0:01:25.640 --> 0:01:30.199 to the federal government for purposes of international aid. Whether 0:01:30.240 --> 0:01:32.399 or not the financial cops are going to stay on 0:01:32.480 --> 0:01:35.440 the beat or are people just now is an open 0:01:35.520 --> 0:01:41.520 season on cheating consumers. Look, Donald Trump needs to settle 0:01:41.560 --> 0:01:45.720 down and focus on what he ran for president on, 0:01:46.319 --> 0:01:51.720 and that is lowering costs for American families. That's where 0:01:51.720 --> 0:01:54.120 he needs to keep his attention and that will put 0:01:54.160 --> 0:01:57.960 the Fed in a much better place to lower interest rates. 0:01:59.200 --> 0:02:03.080 Well, Kayley mentioned the CFPB Senator, so let's talk about 0:02:03.360 --> 0:02:06.800 consumers for a moment. This is obviously something that's very 0:02:06.800 --> 0:02:08.880 important to you, and we got into it with Mick 0:02:08.960 --> 0:02:12.840 Mulvaney yesterday, former Acting White House Chief of Staff, who 0:02:12.840 --> 0:02:15.040 spent some time at that agency, and what he had 0:02:15.080 --> 0:02:17.280 to say about the double edged sword of how the 0:02:17.320 --> 0:02:18.519 CFPB is funded. 0:02:18.600 --> 0:02:22.560 Let's listen, Liz Warren created this agency when she was 0:02:22.560 --> 0:02:25.000 a Harver professor. She drummed up the idea she wanted 0:02:25.040 --> 0:02:29.480 something in her mind that was above politics. Consumer protection 0:02:29.600 --> 0:02:33.079 in her mind, was too important to trust too elected officials. 0:02:33.160 --> 0:02:35.239 The double edged sword of that is that when ro 0:02:35.360 --> 0:02:38.880 Hitchopra's running the place and Congress wants to shut them down, 0:02:39.280 --> 0:02:41.040 he can sort of go and get his money without 0:02:41.040 --> 0:02:43.799 having to worry about what Congress thanks. But the other 0:02:43.880 --> 0:02:46.040 side of the sword is if russ Vote is running 0:02:46.040 --> 0:02:47.840 the place and he doesn't want to draw any money 0:02:47.840 --> 0:02:49.760 down from the Fed, he doesn't have to. 0:02:51.440 --> 0:02:55.840 When you consider that funding mechanism, Senator, did you trump 0:02:55.919 --> 0:02:59.760 proof the CFPB enough to withstand this period of time? 0:03:00.760 --> 0:03:02.800 So you know, I hope you had a good time 0:03:02.880 --> 0:03:07.160 yesterday with Migmulvaney. But let's be clear. The CFPP is 0:03:07.280 --> 0:03:11.440 funded in the largest sense, just like every other bank regulator, 0:03:11.919 --> 0:03:15.639 starting Peck in eighteen sixty three with our very first 0:03:15.680 --> 0:03:19.320 bank regulator, the Office of the Controller of the Currency, 0:03:19.960 --> 0:03:25.120 Congress said we cannot fund the banking regulators through the 0:03:25.160 --> 0:03:29.240 appropriations process and expect them to still do their jobs. 0:03:29.840 --> 0:03:33.560 Even in eighteen sixty three, they were so afraid that 0:03:33.600 --> 0:03:38.680 those big financial institutions would come in and influence Congress 0:03:39.240 --> 0:03:42.920 to cut back, for example, on the money to enforce 0:03:43.640 --> 0:03:48.680 the legal regulations. And so all of the agencies that 0:03:48.960 --> 0:03:54.000 are the banking regulators have been funded outside the political process. 0:03:54.400 --> 0:03:58.280 And by the way, Midgmulvaney, the Republicans. Some of the 0:03:58.400 --> 0:04:02.320 giant banks have already argued all the way to the 0:04:02.400 --> 0:04:06.480 United States Supreme Court and back again that that kind 0:04:06.520 --> 0:04:09.920 of funding is not right, and the United States Supreme 0:04:09.960 --> 0:04:12.680 Court said it's fine. Congress has done it in many 0:04:12.680 --> 0:04:16.120 other circumstances. They can continue to do it. But you 0:04:16.160 --> 0:04:18.120 know what this is really about, and where we are 0:04:18.240 --> 0:04:23.600 right now, is about sidelining the cops, the financial cops. 0:04:25.080 --> 0:04:30.000 Right now, we have no one who is enforcing the 0:04:30.040 --> 0:04:37.839 consumer financial protection laws anywhere in our federal government on 0:04:38.120 --> 0:04:42.120 the big banks and the non bank financial institutions. That's 0:04:42.160 --> 0:04:45.760 what Chair Pal said today, and that's a real problem 0:04:45.920 --> 0:04:50.279 for every American who has a credit card, mortgage, payday loan, 0:04:50.600 --> 0:04:56.279 car loan, student loan. Right now, Donald Trump Elon Musk 0:04:56.279 --> 0:05:01.040 have just declared open season on every consumer in America. 0:05:02.560 --> 0:05:06.040 Well, what about open season on the financial regulators? As 0:05:06.040 --> 0:05:08.800 we talk about those that have similar funding structures to 0:05:08.880 --> 0:05:13.000 the CFPB. Senator, where are you concerned they'll target next? 0:05:14.000 --> 0:05:20.960 Look, if the Republicans want to change the funding mechanism 0:05:21.000 --> 0:05:24.760 to the CFPB, they've got the majority in the House 0:05:24.800 --> 0:05:27.479 and the Senate. Let them come over here and try 0:05:27.520 --> 0:05:31.520 to do that. Don't make an end run that is 0:05:31.680 --> 0:05:38.799 clearly illegal by letting Elon Musk shut down the agency. Effectively, 0:05:39.360 --> 0:05:43.280 come over here to Congress. Congress created the CFPB and 0:05:43.400 --> 0:05:47.320 the other regulators, and Congress is the only one that 0:05:47.400 --> 0:05:51.680 can shut them down. You might ask yourself, though, since 0:05:51.680 --> 0:05:54.200 they're in control, why haven't they done that? And I'll 0:05:54.200 --> 0:05:58.120 tell you the reason why. It's because the CFPV is 0:05:58.520 --> 0:06:02.800 very popular, and it's not just popular among Democrats, it's 0:06:02.880 --> 0:06:08.800 popular among Republicans and independence because nobody likes getting cheated 0:06:09.279 --> 0:06:13.920 by a giant bank, Nobody likes getting scammed on their 0:06:14.080 --> 0:06:20.440 car along nobody likes financial institutions taking advantage to consumers, 0:06:20.800 --> 0:06:24.159 and the CFPB is the one agency on the side 0:06:24.160 --> 0:06:25.040 of consumers. 0:06:26.560 --> 0:06:28.159 I don't know if you had your eyes, Senator on 0:06:28.200 --> 0:06:30.760 the other end of Pennsylvania Avenue a little while ago. 0:06:30.760 --> 0:06:33.680 But Elon Musk himself, oh, I believe he referred to 0:06:33.720 --> 0:06:36.040 as the co President in your opening remarks today in 0:06:36.080 --> 0:06:39.760 the committee joined President Trump, who was sitting behind the 0:06:39.800 --> 0:06:43.440 resolute desk. Elon Musk in a black overcoat, talking about 0:06:43.480 --> 0:06:46.359 the effort here in the work that's being done by dose. 0:06:46.440 --> 0:06:47.680 Let's listen quickly to what he. 0:06:47.640 --> 0:06:52.159 Said, What meaning does democracy actually have If the people 0:06:52.200 --> 0:06:56.120 cannot vote and hope they will be decided by their 0:06:56.160 --> 0:06:59.719 elected representatives in the form of the President and the 0:06:59.720 --> 0:07:02.719 s in the House, then we don't live in a democracy. 0:07:02.880 --> 0:07:06.560 We live in a bureaucracy. So it's incredibly important that 0:07:06.640 --> 0:07:09.440 we close that feedback we fix that feedback group, and 0:07:09.480 --> 0:07:13.800 that the public, the public's elected representatives, the President of 0:07:13.800 --> 0:07:17.200 the House and the Senate, decide what happens as opposed 0:07:17.200 --> 0:07:19.760 to a large unelected bureaucracy. 0:07:22.080 --> 0:07:24.920 Senator Warren, is there any chance this could work? 0:07:26.600 --> 0:07:29.200 I have no idea what Elon Musk is trying to 0:07:29.240 --> 0:07:33.760 say here. Does he not actually understand how government works? 0:07:34.240 --> 0:07:37.760 Or is he just trying to blow more smoke here? Look, 0:07:38.080 --> 0:07:42.240 if Congress wanted to shut down the CFPB, they have 0:07:42.440 --> 0:07:44.240 the power to do it, just like they have the 0:07:44.280 --> 0:07:48.600 power to shut out any other agency in government. That 0:07:48.920 --> 0:07:52.200 is the power allocated to Congress. It is not the 0:07:52.240 --> 0:07:57.120 power allocated to Elon Musk. Nobody voted for him, and 0:07:57.360 --> 0:07:59.960 even if they had, nobody at the other end of 0:08:00.040 --> 0:08:04.600 Pennsylvania Avenue has the right to shut down an agency 0:08:05.200 --> 0:08:08.880 and not spend the money and do the work that 0:08:09.040 --> 0:08:13.800 Congress has actually empowered it to do so. 0:08:14.000 --> 0:08:16.720 Is Congress and specifically your party within it, as the 0:08:16.760 --> 0:08:20.680 minority senator, is the only real recourse you have here 0:08:20.800 --> 0:08:23.520 to act against what the Department of Government efficiency in 0:08:23.600 --> 0:08:27.400 this administration is doing to shut down the government next month. 0:08:29.440 --> 0:08:34.079 You know, I listen to the premise of your question. No, 0:08:34.920 --> 0:08:39.720 when people in the administration are violating the law, we 0:08:39.800 --> 0:08:42.280 have a lot of recourse. Starts out with a whole 0:08:42.320 --> 0:08:46.240 bunch of lawsuits that are out there right now against them. 0:08:46.679 --> 0:08:50.920 And is those lawsuits correctly determined that they are breaking 0:08:50.960 --> 0:08:54.000 the law, they got to stop. That means they have 0:08:54.080 --> 0:08:56.400 to restart the payments. That means they have to put 0:08:56.400 --> 0:08:59.719 the financial copts back on the beat. That means they 0:08:59.760 --> 0:09:03.920 have to go ahead and continue the government contracts as 0:09:04.200 --> 0:09:08.640 the law requires. This is how government works, three equal 0:09:08.800 --> 0:09:13.280 branches of government. And right now in the courts there's 0:09:13.400 --> 0:09:17.959 litigation over what the administration, what Elon Musk has done. 0:09:18.559 --> 0:09:21.800 When he's found to have violated the law, he's supposed 0:09:21.800 --> 0:09:24.240 to get in compliance with the law. This is not 0:09:24.280 --> 0:09:27.120 a problem we need to fix later. This is a 0:09:27.160 --> 0:09:31.600 problem right now. When we have got Elon Musk and 0:09:31.760 --> 0:09:37.320 his little band of hackers in our financial system illegally, 0:09:37.520 --> 0:09:38.800 then we need to get him out. 0:09:40.040 --> 0:09:42.680 Well, Senator, I think Kayley was maybe referring to a 0:09:42.679 --> 0:09:45.120 couple of senators from New Jersey who suggested that a 0:09:45.160 --> 0:09:47.600 government shutdown may be one of the only ways to 0:09:47.640 --> 0:09:51.160 put pressure on this situation. That was a conversation on 0:09:51.240 --> 0:09:54.319 Sunday Morning television. But as we talk today on Bloomberg 0:09:54.400 --> 0:09:57.520 TV and radio, I wonder your thoughts on some concerns 0:09:57.520 --> 0:10:00.400 that if there were in fact a shutdown, no matter 0:10:00.400 --> 0:10:03.040 whose fault it is, some of these departments might not 0:10:03.120 --> 0:10:06.160 ever reopen when there was a deal to fund the 0:10:06.200 --> 0:10:09.080 government because of the efforts of dogs. Do you see 0:10:09.080 --> 0:10:09.560 it that way? 0:10:10.480 --> 0:10:13.000 Look, I appreciate that you frame the question the way 0:10:13.040 --> 0:10:18.080 you have. Let's understand, Donald Trump is already shutting the 0:10:18.120 --> 0:10:24.040 government down by letting Elon Musk move in against us AID. 0:10:24.480 --> 0:10:27.720 He's shutting down the government by letting them move against 0:10:27.760 --> 0:10:32.480 the Consumer Financial Protection Bureau and firing the financial cops. 0:10:32.840 --> 0:10:39.600 He's shutting the government by renegging on millions of federal contracts. 0:10:39.880 --> 0:10:43.000 He's shutting down part of the government shoot He's shutting 0:10:43.080 --> 0:10:47.360 down the government that promised to help fund childcare centers 0:10:47.440 --> 0:10:51.560 and places that are trying to help vents find housing. 0:10:52.160 --> 0:10:56.800 Donald Trump, through his co president Elon Musk, is in 0:10:56.840 --> 0:10:59.160 the business of trying to shut down the government right 0:10:59.200 --> 0:11:03.600 now and doing so illegally. That's why we're in the courts. 0:11:03.679 --> 0:11:06.560 That's why we need to solve this problem, not weeks 0:11:06.600 --> 0:11:09.400 from now. We need to solve it right now because 0:11:09.440 --> 0:11:11.839 people are getting hurt right now. 0:11:13.000 --> 0:11:15.000 Well, stay close with us on this, Senator, We have 0:11:15.040 --> 0:11:17.360 a lot to learn still and your insights are important 0:11:17.400 --> 0:11:17.640 to us. 0:11:17.640 --> 0:11:18.160 On Bloomberg. 0:11:18.240 --> 0:11:21.720 Democratic Senator Elizabeth Warren of Massachusetts, that's the ranking member, 0:11:21.720 --> 0:11:23.960 of course, on the Senate Banking Committee. We thank you 0:11:24.040 --> 0:11:24.640 for being with us.