Congressman Questions CFPB’s Funding Legality

On the heels of controversy surrounding the recess appointment of Consumer Financial Protection Bureau Director Richard Cordray, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) penned a letter this week questioning the funding of the CFPB based on the issue. 

“Given that the Dodd-Frank Act authorizes the Federal Reserve to fund CFPB only at the request of the CFPB’s director, the circumstances under which funds were transfered from the Federal Reserve to the CFPB must be called into question,” according to a statement from Rep. Hensarling’s office. 

In a letter to Federal Reserve Chairman Ben Bernanke, Rep. Hensarling spelled out concerns regarding the CFPB director’s appointment, expressing a question of whether the CFPB can receive funding from the federal government with the questions remaining. 

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“I believe that decisions to fund the CFPB must be scrutinized by, and traceable to, a properly appointed officer of the United States, consistent with Dodd-Frank’s intent and the constitutional requirement that significant authority of the United States be exercised only by such officers,” the letter states. 

A federal court will decide the constitutionality of the recess appointment, with members of the Senate holding a hearing this week on the nominations. 

View the letter

Written by Elizabeth Ecker

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  • Leave it to the Republicans to find government waste (LOL). The House should immediately file a claim in the Court of Claims against the Fed to recover those illegal transfers of funds.

    The implications of the foolhardy appointment of the alleged CFPB Director are just beginning to surface. This mess was a challenge by the President not only to the head of the Senate, Senator Reid, who established the principle of pro forma sessions but also to the Constitution with the President believing he and he alone was the final word on when the Senate is and is not in session.

    Why the President did not appoint now Senator Warren to the post during Senate recesses when the Republicans were not running pro sessions seems very odd. Now the President just looks like a belligerent bully who is trying to overrule the will of the Senate.

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