WASHINGTON—Less than an hour after CFPB Director Richard Cordray declared credit unions should be subject to Bureau rulemaking during his appearance at CUNA’s GAC, one congressman took the stage and said the CFPB needs congressional reform.
Rep. Andy Barr (R-KY), a member of the House Committee On Financial Services, told attendees that Congress is aware that credit unions are suffering from regulatory overload. He followed by saying that he views the CFPB as the “crown jewel” of Dodd-Frank and “should be our primary target for reform. This agency is out of touch.”
Barr’s comments, drew a heavy round of applause, a much more boisterous response than the muted applause Cordray received throughout his presentation.
Barr pointed out that one of the most important oversight tools Congress has is “the power of the purse” to hold agencies accountable for their decisions.
He emphasized that the CFPB has a $600-million budget, and due to Dodd-Frank the Bureau does not receive its funding from congressional appropriation, instead receiving money through an “arbitrary formula straight from the Federal Reserve.”
Barr said he asked Federal Reserve Chair Janet Yellen about whether the Federal Reserve approved the CFPB’s budget and “she said she didn’t know the answer. Frankly, that was shocking to me, that she didn’t know anything about the budget of the agency for which she has control.”
Barr asked Yellen if the Fed had control over the CFPB’s spending allocation—spending Barr said has included a new, large office that has a waterfall, a playground on the roof for kids, and high salaries.
“Again, she didn’t know the answer. I then asked if at least there is a system in place to make sure the agency does not exceed its cap, and (Yellen) said she’d get back to me,” explained Barr. “If we don’t have control over this agency and they have no accountability to Congress, you would hope that at least the bureau would be accountable to the source of their funding. And according to what I got from Yellen, it is not.”