Randy Neugebauer (R-Texas), the chairman of the House Financial Services Subcommittee on Oversight and Investigations, recently criticized the Consumer Financial Protection Bureau for its lack of accountability and transparency.
The brainchild of Democratic Senate hopeful and Harvard professor Elizabeth Warren, the CFPB was created under the 2010 Dodd-Frank Act to supervise consumer financial products and ensure consumer protections.
“Despite the bureau’s broad powers, it is not subject to any of the traditional oversight powers of Congress, particularly the ‘power of the purse,’ which is the cornerstone of the appropriations process,” Neugebauer said, according to The Wall Street Journal.
The CFPB, the budget of which is not subject to the congressional appropriations process, draws its $550 million annual budget from the Federal Reserve. Neugebauer expressed concern regarding the ability of Richard Cordray, the director of the CFPB, to make budget decisions with “nobody” to prevent him from doing so.
“Once the director has decided that a money draw is ‘necessary,’ there is nobody with authority to prevent these funds from being paid out,” Neugebauer said, The Wall Street Journal reports. “Not congressional appropriators. Not the Fed. Not even the president’s Office of Management and Budget. What’s more, the bureau’s transfer requests often come in the form of one-page letters lacking details as to how the money will be spent.”
Neugebauer also criticized the salaries paid to CFPB staff members.
“Pursuant to the Dodd-Frank Act, the bureau’s director may set and adjust employee pay to be comparable to the compensation and benefits provided by the Fed,” Neugebauer said, adding that 60 percent of CFPB employees make more than $100,000 per year, according to The Wall Street Journal. “I look at hard-working Americans — who make a median annual salary of $50,054 — and I wonder: Why is it necessary for a government agency, let alone one that was created to assist and protect consumers, to pay the majority of its employees six-figure salaries?”
Neugebauer proposed his bill, H.R. 1355 — or The Consumer Financial Protection Safety and Soundness Improvement Act — that would eliminate the Fed as the agency’s main funding source and subject the CFPB budget to the congressional appropriations process.
“The transparency and accountability fostered through the appropriations process would allow Congress to better evaluate and improve the bureau’s performance; more easily detect any waste, fraud and abuse at the bureau; and make certain that its policies reflect the public interest,” Neugebauer said, The Wall Street Journal reports.