ACA Supports Moving CFPB Funding to Congressional Appropriations
Proposed legislation from U.S. Rep. Andy Barr would help add transparency and accountability to enforcement actions by the Consumer Financial Protection Bureau.
3/25/2019 10:00 AM
Legislative proposals continue to surface on Capitol Hill to bring the Consumer Financial Protection Bureau funding under congressional appropriations, including the Taking Account of Bureaucrats’ Spending (TABS) Act of 2019 (H.R. 969) introduced in February by U.S. Rep. Andy Barr, R-Ky.
ACA International CEO Mark Neeb states his support of the legislation in a letter to Barr, who serves on the House Financial Services Committee and its subcommittee on financial institutions and consumer credit.
“Changing the source of funding for the Bureau of Consumer Financial Protection (“Bureau” or “CFPB”) from the Federal Reserve System transfers to annual appropriations is appropriate because it adds checks and balances to an agency with little accountability as a result of its single director structure,” Neeb said. “The appropriations process also allows consumers through their elected officials to have a voice in the direction of the Bureau. This is particularly important to add transparency and accountability to CFPB actions.”
According to the bill summary, “[It] eliminates provisions in the Consumer Financial Protection Act of 2010 that fund the Consumer Financial Protection Bureau (CFPB) using transfers from the earnings of the Federal Reserve System. The transfers under current law permit the CFPB to be funded outside of the annual appropriations process, and this bill brings the CFPB into the regular process.”
It is referred to the House Financial Services Committee for review.
Neeb stressed that the CFPB’s enforcement action under former Director Richard Cordray against Weltman, Weinberg & Reis Co., is an example of the need to add transparency and accountability to CFPB actions.
Scott Weltman, managing shareholder of the Ohio-based firm, described the impact of this enforcement action that conflicted with Cordray’s own standards as Ohio Attorney General in testimony before the House Financial Services Committee and a recent episode of ACA Cast.
Cordray approved a lawsuit, once he became director of the CFPB, claiming letters from the firm violated the Fair Debt Collection Practices Act, yet ultimately the lawsuit lacked merit as determined by the U.S. District Court for the Northern District of Ohio.
This type of egregious behavior has unfortunately been commonplace at times since the Bureau's inception," Neeb concluded in his letter to Barr. "As a result, more accountability is needed, and your legislation, the TABS Act, would add much needed transparency and checks and balances to actions of the CFPB. Accordingly, we strongly support passage of the TABS Act."
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