One of the key problems with the CFPB is that it isn’t truly accountable to Congress. Most federal agencies rely on budget appropriations from Congress, and to justify that funding they provide reports to Congress about the agency’s work. If Congress sees an agency is not performing well, it can penalize the agency by altering its level of funding. The CFPB, however, is fully funded through the Federal Reserve and doesn’t rely on Congress for its budget.
New legislation from Senator David Perdue (GA) would change this dynamic. Rather than receiving its funding directly from the Federal Reserve, under his new bill the CFPB would be subjected to the congressional appropriations process like most of the CFPB’s fellow agencies.
The legislation probably isn’t going anywhere–President Obama has pledged to veto efforts to alter the CFPB’s structure. But Senator Perdue’s legislation reminds the public, and his fellow lawmakers, that the CFPB’s activist rulemaking is largely safe from Congressional oversight.