The Consumer Financial Protection Bureau plans to spend $448 million next year, a 26% increase from its 2012 budget of $356 million. Richard Cordray, director of the agency, defended his proposed budget, saying, “Our budget is a means to an important end: to make life better for American consumers.”
Created by the massive Dodd-Frank Wall Street Reform and Consumer Protection Act, the Consumer Financial Protection Bureau (CFPB) is supposed to oversee and regulate sectors of the financial marketplace. At this time, there is little oversight as to how the CFPB spends taxpayer money to advance its mission.
The lack of transparency will change in 2014 if the House Appropriations Committee has its way. The Committee’s 2013 Financial Services and General Government Appropriations bill proposes to change the funding source for the CFPB from the Federal Reserve to the Congressional Appropriations process, beginning in fiscal year 2014.
According the Committee Chairman Hal Rogers, “This bill will help America continue on the path to recovery and fiscal solvency by suppressing job-killing government overreach and overspending, and supporting our economic drivers and job creators.” The bill proposes to require quarterly reports on CFPB’s activities and spending, and allow Congress to review any funding transfers the agency receives from the Federal Reserve.
U.S. Representative Randy Neugebauer criticized the CFPB’s lack of spending transparency in a published statement last month:
The [CFPB] can withdraw more than $550 million each year from the Fed, and no one has any authority to prevent those transfers— not Congress, not the Fed itself, and not even the President’s Office of Management and Budget. The justifications for those transfers are slim at best. Transfer requests can be vague, one-page letters with no details on how the money being requested will be spent.
The House Appropriations bill is admittedly unlikely to pass into law anytime soon, but at least we know some legislators have noticed the lack of CFPB spending transparency and may also be wondering whether we’ve put the fox in charge of the henhouse.
If you have questions about whether your business is or will be affected by the CFPB, the Dodd-Frank Act, or any other area of law, contact us today. The attorneys at Glass & Goldberg provide high quality and cost-effective legal services and advice for clients in all aspects of business litigation and transactional law. Call us at (818) 888-2220, email us at email@example.com, or visit us on the web at www.glassgoldberg.com to learn more about the firm and to sign up for future newsletters.