Consumer Financial Protection Bureau director Rich Cordray -- recess appointed by the president on January 4, continues his regular appearances before the Congress by testifying on the CFPB's budget (his written testimony (88 pages)) today before the House Financial Services Committee's oversight subcommittee at 10am Eastern. It should be webcast live at that link. Nearly all majority members of FSC oppose the CFPB's independent budget, even though all other bank regulators also have an independent budget, so we will see how it goes today. Excerpt from Director Cordray's testimony:
"The Government Accountability Office rendered an unqualified “clean” audit of our financial statements, and an additional independent, third-party audit found that the Consumer Bureau addressed all relevant budgeting requirements under Dodd-Frank. Because we are committed to transparency, we have posted our budget justification, our financial statements, the GAO audit, and the independent audit on our website at consumerfinance.gov. We invite you to look at these documents and will be glad to answer any questions you may have about them. [...]
While our budget is small relative to the other banking agencies, our mission is critical. Our budget is a means to an important end – to make life better for American consumers. Much is at stake. Consumer finance is a big part of the American economy, and it bears heavily on all of our lives. Mortgages allow people to buy homes and spread the payments over many years. Student loans give people with talent and ambition access to higher education. Credit cards are a convenient means of accessing money to make purchases. Products like these can help people achieve their dreams. But as we have seen in recent years, they also can create dangers and pitfalls if they are misused or misunderstood."
In a previous blog entry last week, I linked to the testimony of Professor Arthur Wilmarth, the nation's leading authority on bank regulation, at an FSC hearing last week. It explains that the CFPB's structure and independence are similar to those of other bank regulators. In some ways, as Professor Wilmarth points out, the CFPB is subject to more Congressional control than the others. For more information, see a forthcoming law review article by Professor Wilmarth called The Financial Services Industry’s Misguided Quest to Undermine the Consumer Financial Protection Bureau. It was the subject of an academic symposium co-sponsored by U.S. PIRG last fall.