While few senators attended the Senate Banking Committee’shearing on the effects of consumer finance regulations, SenateDemocrats blasted Senate Republicans for trying to kneecap the CFPBand questioned one witness’ judgement about the agency at Tuesday’sevent.

During his opening statement, ranking member Sherrod Brown(D-Ohio), chided the committee’s Republicans for having forgottenthe recent financial crisis and the reasons why the CFPB was developed. He told committee members to resist thecollective amnesia in the hearing room and in Congress.

“I continue to be troubled by Republicans trying to underminethe CFPB,” he said.

Committee Chairman Richard Shelby (R-Ala.) said, “The veryconsumers that the CFPB was designed to help have been harmed bythe bureau because some of its rules make it more difficult forcompanies to lend and offer products in the marketplace.”

Todd Zywicki, Foundation Professor of Law and Executive Directorof the Law and Economics Center at George Mason University Schoolof Law, said he was an initial supporter of some form of consumerprotections when the Dodd-Frank Act was being debated.

However, in regard to the CFPB, he said, “We’ve created amonster that is harming American families.”

He further criticized the Dodd-Frank Act for the DurbinAmendment, which he said created a handout for retailers.

“While the Durbin Amendment has saved big box retailers billionsof dollars per year in interchange fees, there is no evidence todate that those cost savings have been passed on to retailconsumers,” he said. “In short, consumers are paying higher feesfor bank accounts and receiving no rebates from retailers. Indeed,unlike big box retailers that have received multi-billion dollarwindfalls, many small retailers are actually paying higher merchantdiscount rates than before the Durbin Amendment’s enactment.”

He added that the Durbin Amendment helped put a halt to thediminishing number of free checking accounts offered by thefinancial services industry.

Zywicki’s testimony received praise from Electronic PaymentsCoalition Executive Director Molly Wilkinson. She said in astatement, “Today's hearing highlighted yet another troubling issuewith the Durbin Amendment and EPC is glad to see lawmakers taking afresh look at this harmful provision.”

Shelby further criticized the bureau for using enforcementactions rather than going through the rulemaking process.

Witness Leonard Chanin, counsel at Morrison and Foerster,criticized the agency, stating that the CFPB’s enforcement actionssolely take place between the parties involved and otherinstitutions may or may not choose to abide by the enforcementactions.

Zywicki said he is concerned about the CFPB’s consumer complaintdatabase in that it dumps unverified records onto the generalpublic. He added the complaint database is equivalent to agovernment-sponsored form of Yelp.

“I am incredulous at this testimony,” Brown said.

Brown called into question what he referred to as theunsubstantiated claims by some of the witnesses and blasted themfor criticizing the CFPB’s consumer complaint database as acollection of one-sided, inaccurate, unverifiable complaints.

Even the Federal Reserve cannot verify every complaint itreceives, he added.

In the same vein, during the House Financial Services Committeehearing with CFPB Director Richard Cordray on March 16, Sen.Dean Heller (R-Nev.) questioned Chanin on the CFPB’s ability toexempt small institutions.

“It has separate authority to exempt small institutions fromrequirements,” Chanin said. “Especially if there is evidence thatshows it will impact credit unions.”

However, Sen. Elizabeth Warren (D-Mass.) called Chanin’stestimony into question for his comments against the CFPB and itsactions.

Warren said Chanin, who worked at the Federal Reserve Board forsix years as assistant director and deputy director of the Divisionof Consumer and Community Affairs, did nothing to help during thefinancial crisis in his role.

“Why should we listen to you now?” she asked Chanin.

In response, Chanin said there was no data provided to the Fedthat suggested a crisis in the making.

However, Warren cited a report from the Bipartisan FinancialCrisis Inquiry Commission that called the Fed’s lack of response a“pivotal failure” in the creation of the financial crisis.

“You had the legal authority and legal responsibility toregulate deceptive mortgages, including dangerous subprime lendingthat sparked the 2008 financial crisis,” Warren said. “But youdidn’t do it, despite years of calls and even begging from consumeradvocates and others, asking you to act. Instead, you didessentially nothing.”

She continued, “Given your track record at the Fed, why shouldanyone take you seriously now? Did you have your eyes stitchedclosed?”

Cordray will testify before the Senate Banking Committee in theCFPB’s semi-annual report on Thursday.