financialservices.house.gov
Cmte Financial Services (R)
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Committee to Examine CFPB’s Spending
Washington, Feb 14 -
A Financial Services subcommittee hearing on Wednesday will mark the first time Congress examines spending by the Consumer Financial Protection Bureau (CFPB).
The CFPB, which was created by the Dodd-Frank Act, is specifically designed to evade congressional oversight. The congressional appropriations process is the most time-tested method for monitoring the effectiveness of government agencies and holding them accountable to the American taxpayer. Yet the CFPB receives its funding outside the appropriations process through a mandatory transfer of funds from the Federal Reserve.
By law, the Federal Reserve must transfer to the CFPB whatever funds its director requests up to a certain percentage of the Fed’s yearly operating expenses. For fiscal year 2013, that amount equals $597 million. If the CFPB director deems this amount to be insufficient, the director can ask Congress for an additional $200 million. In the last 18 months, the CFPB has requested more than $338 million from the Federal Reserve.
The Dodd-Frank Act also prohibits the House and Senate appropriations committees from reviewing how the CFPB spends its money.
“No one in government should be allowed to spend hundreds of millions of dollars with no questions asked,” said Chairman Spencer Bachus. “This hearing will allow us to focus a little bit of sunshine on CFPB spending, but until there are structural reforms to the bureau there can be no real oversight of it.”
Rep. Randy Neugebauer, the Chairman of the Oversight and Investigations Subcommittee, said, “The decision to fund the CFPB outside of the appropriations process deprived Congress of a major tool for overseeing its operations. Despite the obstacles created by Dodd Frank, the Committee is still hoping to get some idea of how CFPB programs are being run and at what cost. This hearing is important to preserve some semblance of checks and balances on the CFPB until we can subject it to annual appropriations.”
Rep. Neugebauer has introduced a bill to subject the CFPB to the congressional authorization, budget and appropriations process. The legislation, H.R. 1355, was reviewed by the Financial Institutions and Consumer Credit Subcommittee during a hearing on February 8 along with other proposals to make the CFPB more accountable.
The Oversight and Investigations Subcommittee hearing on CFPB spending will take place on Wednesday, February 15 at 10 a.m. in room 2128 Rayburn. The Subcommittee will receive testimony from Richard Cordray of the CFPB.