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A new bipartisan effort is underway to create the Office of an Independent Inspector General to oversee the Consumer Financial Protection Bureau (CFPB).
The Bureau of Consumer Financial Protection-Inspector General Act of 2015 has been put forward by Rep. Steve Stivers (R-OH) and Rep. Tim Walz (D-MN). The representatives noted that there are more than 30 federal departments or agencies that have an independent Inspector General, but the CFPB shares an Inspector General with the Federal Reserve—and that Inspector General is appointed by the Fed leadership without congressional confirmation. Under the new legislation, a new CFPB Inspector General focusing solely on the Bureau’s activities would be appointed by the president and then confirmed by the Senate.
For many of the CFPB’s critics, the bureau’s lack of oversight has created an entity that is not accountable to either the federal or executive branches of government. Although congressional hearings have been held on a number of controversies relating to the CFPB, ranging from price overruns in the construction of the Bureau’s new headquarters, to charges of racial discrimination within CFPB personnel practices, the bureau’s leadership can operate independently without fear of having its budget curtailed (it receives its financing from the Federal Reserve and not from congressional appropriations) or being censured for questionable actions (it does not answer to Office of Management and Budget guidelines, rules and regulations).
“Government accountability is important now, more than ever,” said Rep. Stivers, who had unsuccessfully introduced a similar bill in the last Congress. “This legislation will allow for increased oversight of an agency that has been given broad authority. It is important that we take the necessary steps to ensure the CFPB is accountable to the American people.”
“The CFPB is an important agency that works to ensure that you, the consumer, are protected from things like predatory payday lenders, shoddy mortgage bankers and defective products,” said Rep. Walz. “Their work is important, but that doesn’t mean that they don’t need oversight. I fully support their cause, to stand up for you and believe the appointment of an independent Inspector General will only increase their ability to fulfill their important mission.”