Consumer Financial Protection Bureau (CFPB) Director Richard Cordray testified before the U.S. House Committee on Financial Services Subcommittee on Oversight and Investigations on Feb 15, and told the group that the bureau's expenses for the next two years remain below a statutory budget cap.
Cordray testified that under the Dodd-Frank Act, the CFPB is funded through transfers from the Federal Reserve. Dodd-Frank mandated a cap of $498 million on the transfers for the 2011 fiscal year. That is 10 percent of the Fed's 2009 operating expenses. Cordray told the Subcommittee that the bureau used $123 million in its startup year.
“The Government Accountability Office [GAO] rendered an unqualified ‘clean' audit of our financial statements, and an additional independent, third-party audit found that the consumer bureau addressed all relevant budgeting requirements under Dodd-Frank. Because we are committed to transparency, we have posted our budget justification, our financial statements, the GAO audit, and the independent audit on our website at consumerfinance.gov,” Cordray said.
He testified that the budget for 2012 is $356 million, and in 2013, the budget is at $448 million. Cordray said the CFPB does not plan to ask Congress for further appropriations.
“While our budget is small relative to the other banking agencies, our mission is critical. Our budget is a means to an important end ”“”“ to make life better for American consumers,” Cordray said.
Rep. Spencer Bachus, R-Ala., chairman of the House Financial Services Committee, argued that the CFPB is designed in a manner that allows the agency to avoid oversight.
“The CFPB isn't under the appropriations process,” Bachus said. “If they spend $1 million on paper clips, we can't even say ‘wait a minute you can't do that, next year we're going to cut your budget.' No matter what they spend money on, we have absolutely no control. In a time of a budget deficit, oversight and accountability on spending is urgently important and in this agency, there is no accountability.”
President Barack Obama appointed Cordray to the director position in early January. House and Senate Republicans continue to question whether Cordray's recess appointment was constitutional.
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