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CFPB debate highlights Warren's new status as the 2020 Democratic frontrunner

Aarthi Swaminathan
Finance Writer

Among the many sparks that flew at Tuesday night’s Democratic presidential primary debate, former vice president Joe Biden and Senator Elizabeth Warren battled over the existence of the Consumer Financial Protection Bureau, a signature initiative of the Obama administration.

The brief exchange, which was the fuel for debate well into Wednesday, underscored how the dynamics of the 2020 race are shifting, with the Massachusetts senator emerging as the Democratic frontrunner.

Warren initially brought up the agency as part of a response to what she has has done to create structural change in the U.S. economy. Crediting President Obama, she stressed that the CFPB’s establishment showed that she knew “what we can do by executive authority” because of how the CFPB came into being.

While the CFPB’s existence has long been closely linked to Warren, an onstage skirmish broke out when Biden claimed some of the credit for establishing the watchdog agency — and drew significant reaction online.

“I agreed with the great job she did and I went on the floor and got you votes,” he said. “I got votes for that bill. I convinced people to vote for it. So let's get those things straight too.”

Biden hit with charges of ‘massive mansplain’

Democratic presidential candidate Senator Elizabeth Warren speaks as former Vice President Joe Biden debate during the fourth U.S. Democratic presidential candidates 2020 election debate in Westerville, Ohio, U.S., October 15, 2019. (Photo: REUTERS/Shannon Stapleton)

The concept for a consumer watchdog came from Warren, who was previously a Harvard Law School professor. She had proposed creating an agency to regulate consumer financial products like mortgagesstudent loans, and so on.

The agency came to life in 2010, when lawmakers passed the Dodd-Frank bill, which established the framework for the CFPB. Backers then believed that the agency would help prevent another economic catastrophe such as what happened in 2007 with mortgage-backed lending. Afterward, Obama appointed Warren as a special advisor to set up the agency.

During and after Tuesday’s debate, many watchers were quick to heap scorn on the former vice president, and called into question his recollection of the CFPB’s creation.

Others took issue with the vote-whipping role played by Biden, who is on record having disagreed with Warren before on the issue of financial reform.

Thanks, Obama

U.S. President Barack Obama announces Elizabeth Warren as the special adviser leading the creation of the Consumer Financial Protection Bureau in 2010. (Photo: REUTERS/Kevin Lamarque)

However, the CFPB has come under fire since the Trump administration took over, and Warren and other consumer advocates have voiced broad dissatisfaction with its performance.

The agency was recently criticized by Warren herself on Capitol Hill for inaction, and for hiring industry players who came “straight through the revolving door.

Nonetheless, Warren counts the creation of the CFPB as one of her biggest achievements — she lists it as one of her children on her Twitter bio — and thanked the former President for his help on Tuesday night.

“I am deeply grateful to President Obama, who fought so hard to make sure that agency was passed into law, and I am deeply grateful to every single person who fought for it, and who helped pass it into law,” she said.

Biden then responded: “You did a hell of a job at your job.”

Aarthi is a writer for Yahoo Finance. Follow her on Twitter @aarthiswami.

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