After the tense moments of her last congressional hearing, Elizabeth Warren surprised critics at her second appearance before the House Committee on Oversight and Government Reform with a carrot of sorts.
Warren, now leading the formation of the Consumer Financial Protection Bureau (CFPB), said while the new regulator reserves the right to halt marketing of financial services that are not consumer-friendly, there is no need for such a prohibition from the outset.
"We have made all of our priorities clear, and we have no intention of banning a product," Warren told the panel Thursday.
The agency, devised by Warren and mandated by the Dodd-Frank Act, formally launches July 21. With some lawmakers opposed to her becoming the bureau's permanent director, Warren has been focused on overseeing its construction and defending its powers before skeptical bankers and GOP lawmakers.
The hearing still produced some fireworks. Republicans questioned Warren's role in settlement negotiations over servicers' foreclosure mishaps, while Democrats urged tougher action on servicers responsible for improperly foreclosing on military personnel.
Yet the tone was decidedly less adversarial than it was at Warren's appearance before an Oversight subcommittee in May. There, following a barrage of questions, Warren clashed with subcommittee Chairman Rep. Patrick McHenry, R-N.C., over when she could leave, and McHenry accused Warren of lying.
Oversight Committee Chairman Darrell Issa, R-Calif., had asked Warren to come back to speak to the full panel and to clear her schedule. On several occasions Thursday, Issa thanked Warren for her time and at one point offered her a break after more than two hours of questioning.
"This has been the kind of hearing, at least as to your participation, that we strive for, and we appreciate you being here," Issa said.
When he asked Warren to stay beyond the time he had projected she could leave, Warren assured him she was glad to stay.
"I've cleared my schedule and I'm here for as long as you need me," she said, as Issa grinned.
Still, members of the committee expressed their doubts about the new bureau's work.
McHenry suggested Warren's assertion that products would not be banned initially was a reversal of her earlier position.
"Has your opinion changed this time, because it seemed like what your rhetoric was previously is that there are products that should be banned," he said.
Warren said there had been no inconsistency. She said the bureau's authority to prohibit dangerous products is necessary for eventual abuses.
"The world keeps changing; the world keeps developing. It is a tool in the toolbox, and that's where it should stay," she said.
But she said that was only one tool. Another, which McHenry seemed to approve of, was the agency's ability to improve disclosures, making prices and risks more transparent to consumers.
"I believe in the power of good markets, but they don't work unless people have good information," she said.
Republicans also revisited issues raised at the previous hearing, including the CFPB's leadership structure, how the bureau is funded and what role Warren has played in settlement talks between the big mortgage servicers and government officials over foreclosure problems.
Rep. Connie Mack, R-Fla., accused Warren of undertaking a nationwide campaign to push for her "preferred" settlement with the mortgage servicers.
Warren repeated that the bureau has given advice only when asked, and said she has not spoken with any of the banks involved about the negotiations. "We have been completely unambiguous in telling participants, 'We are not part of the settlement negotiations,'" Warren said.
Carolyn Maloney, a New York Democrat, came to Warren's defense, arguing that nothing should prevent Warren from giving her advice.
"You don't have a vote … but you can answer the phone and you can give advice," Maloney said. "I would say that's a basic American fundamental principle, and one that should be protected for every person, and especially professors and academics that are leading specialists."
Meanwhile, Maloney and other Democrats, including ranking member Elijah Cummings, used the hearing to push for greater oversight of mortgage servicers that have wrongfully foreclosed on members of the military.
Rep. John Tierney, D-Mass., said Republicans were wrong to spend so much time on questions about minute details of the new consumer bureau without giving more attention to the wrongs committed by servicers.
"This is absolutely incredible," Tierney said, adding that the GOP "won't respond [about] a subpoena for banks, but we're going around and around here" about the new bureau.
Before Warren even began her testimony, Cummings filed a motion to subpoena documents from five mortgage servicers — Wells Fargo, MetLife, PHH Mortgage, SunTrust Banks, and U.S. Bancorp — that he said have committed foreclosure abuses. (After initially rejecting the motion, Issa issued a joint statement with Cummings following the hearing agreeing to back such subpoenas.)