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. 

“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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