CFPB Subject to Annual Audits, Study

The Senate continuing resolution passed Friday that will fund the government through the remainder of the fiscal year also included Consumer Financial Protection Bureau provisions; one of which will subject the CFPB to two annual audits, and the other which will require an annual study on the government agency.

The first audit will require an independent review of the CFPB’s operations and budget by an auditing firm the bureau will choose, according to the American Bankers Association. The second audit will require a Government Accountability Office review of CFPB’s financial statements to ensure compliance with “generally accepted government accounting standards.”

The study, according to the continuing resolution, will include an analysis of the impact of regulation on the financial marketplace, including the effects on the safety and soundness of regulated entities, cost and availability of credit, savings realized by consumers, reductions in consumer paperwork burden, changes in personal and small business bankruptcy filings, and costs of compliance with rules, including whether relevant Federal agencies are applying sound cost-benefit analysis in promulgating rules.

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In recent weeks, Elizabeth Warren, CFPB leader and assistant to President Obama, has defended the agency against proposals that would change CFPB governance from a single director to a five-member commission, and would make it easier for for the Financial Stability Oversight council to overturn CFPB regulations.

See ABA’s coverage of the legislation.

Written by Elizabeth Ecker

 

 

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  • While it is understandable why Ms. Warren wants autonomy for the CFPB, it is good that the Senate not the Republican controlled House is pushing accountability into the picture. Ms. Warren not only wants to be named a Czar in name but also one in fact. Her bureau should be just as accountable as any other. Kudos to the Senate.

    It is odd, however, that this alleged pillar of consumer protection would not have been created with such self accountability into its structure. One might calls this chinks already showing up in the armor.

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