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Republicans criticize CFPB’s lack of oversight

Spencer Bachus

Republicans in the U.S. House of Representatives criticized the Consumer Financial Protection Bureau for its lack of oversight in spending on Wednesday.

The agency’s 2013 budget will increase by 26 percent to $448 million. The CFPB does not go through a congressional appropriations process but instead receives money directly from the Federal Reserve, an issue that has many lawmakers concerned, the Los Angeles Times reports.

“If they spend $100 million on paper clips, we can’t even say, ‘Wait a minute, you can’t do that,’” Spencer Bachus (R-Ala.), the chairman of the House Committee on Financial services, said, according to the Los Angeles Times. “Next year we’re going to cut their budget. We have absolutely no control.”

The agency’s budget is, as mandated by law, capped at $548 million.

“Our budget is smaller than other banking agencies,” Richard Cordray, th director of the CFPB, said, the Los Angeles Times reports.

The House committee summoned Cordray to the hearing regarding the bureau’s spending and 2013 budget. During the hearing, the committee criticized the salaries paid out by the agency and, they said, its lack of exposition on the budget.

The White House and Democrats in Congress pushed for the unconventional funding process to prevent lawmakers from having excessive control over the budget and reducing its funding to nothing, as was the case with the former Fannie Mae and Freddie Mac regulator.

“The appropriations process oftentimes can become very political,” Representative Carolyn Maloney (D-N.Y.) said, according to the Los Angeles Times. “It could be it would result in significant cuts in your ability to help people.”

Other financial regulators, including the Office of the Comptroller of the Currency, Cordray and agency supporters said, also receive funds through the same process.

The agency’s budget and director have all been criticized in recent months, with opponents arguing that Cordray has too much authority and not enough oversight.

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