One of the major complaints of the Consumer Financial Protection Bureau (CFPB)'s critics is a lack of Congressional oversight for the Bureau. Lawmakers have re-introduced a bipartisan bill in the U.S. House of Representatives in an attempt to change that.
U.S. Representative Steve Stivers (R-Ohio), along with U.S. Representative Tim Walz (D-Minnesota) re-introduced the Bureau of Consumer Financial Protection-Inspector General Act of 2015, a bill that would create an independent Inspector General for the CFPB.
"Government accountability is important now, more than ever," Stivers said. "This legislation will allow for increased oversight of an agency that has been given broad authority. It is important that we take the necessary steps to ensure the CFPB is accountable to the American people."
The CFPB was created in 2011 as part of the Dodd-Frank Wall Street Reform Act with a mission to "make markets for consumer financial products and services work for Americans — whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products," according to the Bureau's website. The Bureau's actions in carrying out this mission have resulted in several multimillion dollar fines and penalties against financial institutions, notably a $2 billion action levied against non-bank mortgage servicer Ocwen Financial in 2013 for servicing violations.
"The CFPB is an important agency that works to ensure that you, the consumer, are protected from things like predatory payday lenders, shoddy mortgage bankers, and defective products. Their work is important, but that doesn’t mean that they don’t need oversight," Walz said. "I fully support their cause, to stand up for you and believe the appointment of an independent Inspector General will only increase their ability to fulfill their important mission."
The CFPB's critics, such as Representative Jeb Hensarling (R-Texas), have questioned why the Bureau is not accountable to Congress despite being funded by the Federal Reserve, and also why the Bureau is led by a single director when other government agencies such as the FDIC, the Federal Reserve, and the SEC are all led by boards.
Currently, the CFPB shares an Inspector General with the Fed, and that position is appointed by the Fed chair and not subject to U.S. Senate approval. The bill introduced by Stivers and Walz will create the position of independent Inspector General for the CFPB that is appointed by the President and confirmed by the Senate. More than 30 federal government agencies or departments have an independent Inspector General, according to Stivers' website.
A spokesperson from the CFPB declined to comment on the bill.
Stivers originally introduced the bill in the House in December 2013, but it has gained little to no ground since then. The CFPB's backers, primarily Democrats, have stated they are vehemently opposed to any type of CFPB reform and have vowed to protect the Bureau from any type of legislation that would make changes to the status quo.