The CFPB Is Unaccountable
* Consumer Financial Protection BureauUnaccountable Excess: Largely unaccountable to Congress and imbued with sweeping powers, the agency is the epitome of regulatory excess. Because the bureau is ensconced within the Federal Reserve, its budget is not subject to congressional control. This budgetary independence limits congressional oversight of the agency.
* No Congressional Oversight: Although some financial regulatory agencies, such as the Federal Deposit Insurance Corporation and the Fed itself, also fall outside the congressional appropriations process, they are the exceptions rather than the rule among government agencies.
* No Presidential or Fed Supervision, Either: The CFPB’s status within the Fed effectively precludes presidential oversight, while the Federal Reserve is statutorily prohibited from “intervening” in CFPB affairs.
* Undefined Authority Risks Abuses of Power: The CFPB’s accountability is further minimized by the vague language of its statutory mandate. It is empowered to punish “unfair, deceptive and abusive” business practices. While unfair and deceptive have been defined in other regulatory contexts, the term abusive is largely undefined, granting the CFPB officials inordinate discretion to define its own powers.
* Veto of Bureau Actions Exceedingly Narrow: The Financial Stability Oversight Council may exercise oversight of the CFPB only if bureau actions would endanger the “safety and soundness of the United States banking system or the stability of the financial system of the United States.” Any veto of CFPB action would also require the approval of two-thirds of the council’s 10-member board.
Consumer Financial Protection Bureau: Unaccountable and Costly