Grassley: There aren't 'adequate checks' over consumer protection agency

Grassley’s comments came just hours after the Senate voted 71-29 to end debate on the nomination of Richard Cordray to lead the CFPB. A final vote on Cordray’s nomination could come as early as today.

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The Dodd-Frank financial reform law passed in 2010 allowed the inspector general of the Federal Reserve to also oversee the CFPB. But Grassley said this “marriage of convenience” has created a “problem” and “confusion” within the Federal Reserve. He insisted it would be better for the CFPB to have its own inspector general.

“I believe this creates a great deal of confusion and battle for resources,” Grassley said. “But that board’s function is very different from the Federal Reserve. … The end result is neither gets fully overseen.”

Grassley said that he and Sen. Tom Coburn (R-Okla.) offered an amendment to the Senate Budget resolution that would have created an inspector general solely to oversee the CFPB, but that Democrats blocked it. Grassley pointed out that 73 other federal agencies have their own inspector general and that the CFPB shouldn’t be exempt from congressional oversight.

The CFPB was created to protect American consumers from predatory banks and lenders.