Friday, February 17, 2012

Consumer Financial Protection Bureau: Consuming Consumer-Taxpayer Dollars At the Consumers Benefit?

“GOP legislators have been howling for months now about the Consumer Financial Protection Bureau's ability to set its own budget (within a generous upper limit) and why that should concern U.S. taxpayers in a time of ballooning deficits. A congressional hearing this week only underscored the validity of their case.

CFPB chief Richard Cordray told a House Financial Services subcommittee that the bureau "only used $123 million" of its $498 million cap last year and expects to remain "considerably below" budget caps of $356 million and $448 million for 2012 and 2013, respectively. The bureau has already undergone two audits. Those documents, plus the bureau's "budget justification" and quarterly reports are all posted on

Mr. Cordray's testimony sounded convincing -- until the committee dug into the details. Rep. Randy Neugebauer noted that the bureau asked for some $96 million dollars last year in a single-page letter, with no spending justification -- something Mr. Cordray replied was allowed "by law." Rep. Michael Fitzpatrick pointed out that the 2012 fiscal year budget estimates $130 million for "services," with no more explanation, and gives little reason for hiring 400 employees. Rep. James Renacci asked why the bureau was spending $55 million to renovate its headquarters. Mr. Cordray had no reply, nor could he explain why the the bureau wants to hire 1,400 employees in total. Oh, and the agency offers consumer information in 191 languages.

The bottom line is that Mr. Cordray may be uncomfortable (or not) having to answer tough questions, but ultimately the legislature has little leverage over him. The CFPB chief sets his own budget, can only be fired by the president for extreme malfeasance and holds vast regulatory powers over wide swathes of the consumer financial industry. Expect the CFPB spending machine to keep rolling on.” - The CFPB Spending Machine, Mary Kissel, The Wall Street Journal’s Political Diary, 02/17/2012


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