U.S. Senator David Perdue (R-Georgia) has introduced a bill that would make the Consumer Financial Protection Bureau (CFPB) more accountable by bringing it under the Congressional appropriations process, according to an announcement on Perdue's website.
Perdue said the Consumer Financial Protection Bureau Accountability Act of 2015 will provide critical Congressional oversight for a Bureau that is funded by the Federal Reserve but is led by a single director rather than a board of directors and is not accountable to Congress.
The CFPB was created in 2011 out of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Since then, the Bureau has handed down several multi-million and even billion dollar fines and penalties to agencies, firms, and companies that it believes has engaged in predatory financial practices, including many against mortgage lenders and servicers. The Bureau has been the subject of much controversy, with those in opposition claiming that the Bureau's actions are overreaching.
"The Consumer Financial Protection Bureau was spawned from the disastrous Dodd-Frank financial regulation law," Perdue said. "Georgians sent me to Washington to help restore accountability and transparency to the federal government, and the CFPB needs a major dose of both. Right now, the CFPB is a rogue agency that dishes out malicious financial policy and creates new rules and regulations at whim without real Congressional oversight. The American people, through Congress, deserve a closer look at the CFPB and how its actions will impact consumers."
Dodd-Frank established a budget of up to 12 percent of the Fed's annual operating expense for the CFPB, which amounts to approximately $600 million with no oversight from Congress on the amount the Bureau is spending.
"Additionally, the agency itself has failed to operate within its own budget and proven it is more concerned with preserving its own power than protecting the public," Perdue said. "Ultimately, I believe the CFPB should be eliminated, but an important first step is bringing it into the light for the American people."
Perdue's proposal is gaining support among consumer and taxpayer advocacy groups, according to the Senator's website.
"The CFPB represents the greatest threat to consumer choice and freedom this country has seen in a long time," said Sarah Makin on behalf of the U.S. Consumer Coalition. "With the enforcement authority of the DOJ, and the regulatory authority of the FDIC, this unaccountable agency has limitless power to impact the lives of Americans. While there may be a role for the CFPB, we applaud Senator Perdue for working to protect consumers from the so-called consumer protector."
Republicans promised they would take aim at Dodd-Frank and in particular the CFPB when they gained a majority in both the Senate and the House back in November. U.S. Representative Sean Duffy (R-Wisconsin) introduced a comprehensive CFPB reform package in March that included a proposal (H.R. 1261) similar to the one introduced by Perdue in the Senate. Though Democrats have vowed to fight efforts to reform the CFPB, one of Duffy's proposals, the Bureau Advisory Commission Transparency Act, passed in the House by a 401 to 2 vote in mid-April.
In February, Representatives Steve Stivers (R-Ohio) and Tim Walz (D-Minnesota) revived a bipartisan bill that would create an independent Inspector General for the CFPB that is appointed by the president and approved by the Senate. The Bureau currently shares an IG with the Federal Reserve, a position that is appointed by the Fed chair and not subject to Senate approval.