A common complaint against the CFPB is that the agency wields too much power without enough accountability. House Financial Services Committee Chairman Jeb Hensarling recently described the CFPB as “the single most powerful and least accountable Federal agency in all of Washington.” And as U.S. Senator David Perdue has complained, “the CFPB is a rogue agency that dishes out malicious financial policy and creates new rules and regulations without any oversight from Congress.”
This perception may soon change. The U.S. House of Representatives voted Tuesday to pass H.R. 1265, the Bureau Advisory Commission Transparency Act (“BACTA”) by a bipartisan, overwhelming margin of 401 to 2. The bill seeks to make the CFPB subject to the Federal Advisory Committee Act (“FACA”), which, among other items, requires an agency to hold committee and subcommittee meetings in public. Only three agencies are statutorily exempted from FACA – the Central Intelligence Agency, the Officer of the Director of National Intelligence, and the Federal Reserve.
Yet despite the fact that the CFPB is not involved in intelligence gathering or the setting of monetary policy, Director Richard Cordray has taken the position that it is not subject to FACA. When one Congressman recently requested to attend the CFPB’s Consumer Advisory Committee meeting, his staff was told via email, “We cannot accommodate the Congressman’s request.”
However, the writing may be on the wall that signals the end of this secrecy by the CFPB. In addition to BACTA, which is now in the Senate, a budget amendment has been proposed by Senator Perdue to subject the CFPB to the Congressional appropriations process, rather than allowing its continued operation under the Federal Reserve with no accountability to Congress. The amendment seeks to allow Congressional oversight of the CFPB’s functions in light of its roughly $600 million budget.
The CFPB does not appear to have commented publicly on these legislative measures. Yet the agency devotes a full page of its website to open government. There, it states that “Transparency is at the core of our agenda, and it is a key part of how we operate.”
The days of the CFPB’s clandestine policymaking and unbridled activities may be coming to a close. Don’t expect it to happen without a fight.