Patrick McHenryChairman

Washington, March 29, 2012 - Financial Services Committee Chairman Spencer Bachus delivered the following statement during a hearing to receive the semiannual report from the Consumer Financial Protection Bureau (CFPB).

"The CFPB is an independent federal agency whose authority is unprecedented and far-reaching.  Title X of the Dodd-Frank Act confers virtually unfettered discretion on a single person, the CFPB Director, to identify financial products and services that he or she finds to be 'unfair, deceptive, or abusive,' and ban them, under a highly subjective standard that has no legally defined content.

"All of us agree on the need to protect consumers.  All of us also agree that every government bureaucracy needs transparency and oversight.  The simple truth is there is no reason that we cannot have both:  robust consumer protection and an agency that is accountable for the actions it takes and the resources it uses. 

"The cause of greater accountability was not well-served by the President’s decision to circumvent the advice and consent of the Senate and install Mr. Cordray as the CFPB’s Director in a constitutionally questionable maneuver.  As I have told you previously, Mr. Cordray, I believe neither you nor the agency you head were well-served by that decision either, since it casts a legal cloud over the legitimacy of the Bureau’s regulatory and enforcement activity.  And as I’ve also said previously, this dispute has nothing to do with you personally but with the structure and lack of accountability surrounding the agency you’ve been asked to lead.

"The House has passed two bills this Congress – H.R. 1315 and H.R. 4014 – that make the CFPB more accountable without, in any way, hampering its ability to protect consumers.  H.R. 1315 includes provisions placing the CFPB under the management of a five-member, bipartisan commission – an idea originally proposed by and supported by House Democrats.  H.R. 4014, which passed the House just this week with strong bipartisan support and the support of Mr. Cordray, fixes a critical omission in the Dodd-Frank Act that could have resulted in regulated institutions waiving their attorney-client privilege when sharing confidential information with the CFPB.  

"Given that the CFPB is not subject to the annual Congressional budget process, hearings like this are essential to the oversight process.  In fact, hearings like this are the only opportunity currently available to Congress to exercise any oversight of the CFPB at all."