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Consumer bureau's budget faces GOP scrutiny
Consumer Financial Protection Bureau Director Richard Cordray found himself back on Capitol Hill Wednesday, once again defending the agency's actions from scrutinizing Republicans.
The topic of the day's hearing was the CFPB's budget, and in particular how little control Congress can exert on it. As drawn up in the Dodd-Frank law creating the agency, the CFPB receives its budget as a portion of the Federal Reserve's funds, which can top out around $500 million. More significantly for lawmakers, its budget is not set by the congressional appropriations process, which Republicans argue deprives them of a crucial tool for steering the bureau.
Appearing before a House Financial Services subcommittee, Cordray had to fend off probing questions from multiple Republicans about how the CFPB obtained its funds and to what end.
"The appropriations process is the most time-tested method for monitoring the effectiveness of government agencies and holding them accountable to the American taxpayer," said House Financial Services Committee Chairman Spencer Bachus (R-Ala.). "The truth is he could tell us that the CFPB spent $100 million on paper clips last year and there is nothing Congress could do about it."
"When I look at what you're producing and what other agencies are required to produce, it seems to me y’all could use a little beefing-up in your budgeting performance," he said.
Cordray defended his agency before lawmakers, arguing in part that the relatively new agency does eventually plan to offer more comprehensive accounting for its budget. He also highlighted regular audits by outside sources, including the Government Accountability Office, which will ensure that the CFPB is using funds wisely. He also pointed out that hearings like the one he was attending also play a role, directly rebutting Bachus's claim.
"I believe that the oversight you all are exhibiting over us is meaningful, it is significant. The notion that was suggested earlier that we could spend $100 million on paperclips and it wouldn’t matter ... We could brought here in front and have to explain ourselves publicly, and embarrass ourselves if it turned out we were engaged in meaningless expenditures."
Wednesday's hearing marked the latest in a concerted attempt by Republicans to depict the new agency as dangerously overpowerful and lacking essential checks on its authority.
Republicans in both chambers have fought to bring the bureau under greater congressional control, as well as to replace Cordray's position with a bipartisan board of directors.
"What we have here is a rogue director in charge of a runaway budget for an agency whose mission is still unclear," said Rep. Francisco "Quico" Canseco (R-Texas). "This is a recipe for disaster."
Democrats, meanwhile, continued their own campaign to paint Republicans as opposing an agency designed to protect consumers in the wake of the financial crisis.
"It is shocking to me that my friends on the other side of the aisle act like the financial crisis ... didn't even happen. They don't think anything should be done!" said Rep. Keith Ellison (D-Minn.).
Rep. Barney Frank (D-Mass.), the ranking member of the full panel, pointed out that the CFPB has been a somewhat regular presence on Capitol Hill, arguing that the hearing to discuss lack of oversight disproves that claim.
"This is the sixth or seventh oversight hearing on the CFPB's lack of oversight," he said. "It raises philosophical questions. Are we really here?"
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