The director of the controversial Consumer Financial Protection Bureau (CFPB) testified before the Senate Banking Committee on the Bureau's perceived lack of oversight and accountability in a full committee hearing titled "The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress" on Tuesday.
Committee Chairman Richard Shelby (R-Alabama) questioned CFPB Director Richard Cordray on the Bureau's current oversight and accountability, and also asked the director about the Bureau's current plans to renovate its office space. Shelby mentioned those plans include a waterfall and a four-story glass staircase, and that reports have stated the cost is more than three times over the projected budget.
"We are accountable to this Congress in numerous ways that are in our statute," Cordray said at the hearing. "The GAO (Government Accountability Office) does a regular audit of our expenses and expenditures each year, which is not common to federal agencies. We are subject to an independent audit also by our statute."
Cordray also cited the fact that the Bureau has been subject to rigorous audits from the CFPB's inspector general, which it shares with the Federal Reserve. He also pointed out that he is required by law to testify twice a year before the Senate Banking Committee and twice a year before the House Financial Services Committee as evidence of accountability, and the Bureau has "numerous other accountability mechanisms." He said it was "not unique" that as a banking agency, the Bureau was not subject to the appropriations process.
Shelby said in his opening statement at the hearing that he believes subjecting the Bureau to the appropriations process is necessary.
"Some of us have urged the adoption of specific reforms to make the Bureau more accountable and transparent," Shelby said in his opening statement. "By putting the Bureau through the appropriations process and establishing a board of directors, it would resemble other independent agencies and provide Congress with the ability to conduct meaningful oversight. Unfortunately, calls for reform have been rejected in past Congresses. Therefore, the only remaining oversight tool available to Congress is to hold hearings and hope that any concerns expressed will be addressed."
As for the building renovations, Cordray said reports of going over budget were "overhyped and misrepresented."
"The building costs have remained essentially static from before we took on this building and the Office of Thrift Supervision had performed an audit that saw the building was in disrepair and needed an overhaul if it was going to remain a productive government asset," he said. "The construction costs have been pretty steady between $95 and $120 million, approximately."
Committee Ranking Member Sherrod Brown (D-Ohio) pointed out in response to the criticism of budgets by reminding the Committee that the Bureau has returned $10.1 billion to about 17 million consumers since its inception four years ago.
Brown said that he believed attempts by the Bureau's opponents to replace Cordray with a Senate-approved board or commission were attempts to "cripple" the CFPB and set up "one nomination fight after another."
"Much of the CFPB’s most important work has centered on mortgage regulation," Brown said. "The agency’s ability to repay rules ensure that consumers are not trapped in mortgages that they cannot afford. The CFPB’s rule to streamline forms will help consumers understand what is happening at the closing table. All of these actions speak for themselves as to why this agency is so important to our nation’s consumers. Yet, opponents continue to work to undermine the agency – by weakening its independence or changing its structure. Lately, there have been attempts to chip away at actions the agency has taken on arbitration and small-dollar loans. They have argued the agency should not be able to collect data – data about markets that were formerly non-transparent and unregulated. I will continue to fight all of these attempts to destabilize the CFPB."
Click here to view a video of the hearing.