By Ben Goad - 01/28/14 03:59 PM EST
The director of the Consumer Financial Protection Bureau faced a barrage of Republican criticism on Tuesday and was pressed to justify the agency’s $100 million building renovation.
Tensions ran high as Richard Cordray defended the 2-year-old agency’s track record during a hearing of the House Financial Services Committee.
Committee Chairman Jeb Hensarling (R-Texas) assailed the bureau as “unaccountable” and questioned the agency’s expenditure of more than $100 million for renovations at its headquarters near the White House.
Hensarling placed the renovation’s cost at $483 per square foot, which he said is more than what was spent on the Trump World Tower in New York or Las Vegas’s swanky Bellagio hotel and casino
Cordray acknowledged the government selected “a tough building” to lease for the young agency but emphasized the General Services Administration is overseeing the project.
“The notion that we would try to build some kind of palace that we don’t own or control makes no sense to me,” Cordray said.
The hearing was ostensibly held for Cordray to deliver the CFPB’s semiannual report to Congress. The agency was created by the Dodd-Frank Wall Street reform law and is tasked with safeguarding the public from a variety of financial threats.
But Republicans have assailed the CFPB as overly powerful, objecting to both its structure and the way it is funded.
“When it comes to the credit cards, auto loans and mortgages of hardworking taxpayers, the CFPB has unbridled, discretionary power not only to make them less available and more expensive, but to absolutely take them away,” Hensarling said.
“This is not the rule of law,” he said. “It is the rule of rulers, and the rulers are unaccountable.”
Cordray touted the agency's implementation of sweeping new mortgage rules that took effect this month. Drafted in response to the 2008 financial crisis and accompanying foreclosure meltdown, the regulations are meant to rein in risky lending practices and ensure borrowers have the ability to repay their home loans.
But Republicans raised concerns that the rules are having a chilling effect on lending, particularly with regard to manufactured homes.
“In your attempts to protect the small guy, you're actually limiting access to credit,” said Rep. Steve Pearce (R-N.M.).
The hearing’s most heated exchange came later, after Pearce questioned whether data being collected by the agency might ultimately be used for unintended purposes. He cited the scandal over Internal Revenue Service data that was used to target conservative groups.
The usually mild-mannered Cordray bristled at the suggestion.
“The notion that we’re somehow going to take information and use it for political campaigns is deeply offensive,” he said. “You haven’t a shred of evidence on which you’re basing that. That’s just wild allegations, and its not befitting of this committee.”
Democratic members of the panel defended the CFPB’s work throughout the hearing and took aim at a new GOP effort to collect information on the regulator’s actions.
Earlier this week, Hensarling announced that the committee was devoting a section of its website to the collection of feedback from the public about the CFPB’s performance and its impact on businesses and consumers.
Cordray lauded the panel for soliciting input from the American people but stressed committee leaders should be transparent in the release of information they receive.
But Democrats said the initiative was designed to collect negative stories about the agency, pointing to the language used on the website.
“In my business, this is push polling,” said Rep. Jim Himes (D-Conn.). “It is certainly leading the witness. It is certainly fearmongering.”