Blaine Luetkemeyer: “In June, the House passed H.R. 10, the Financial CHOICE Act, with overwhelming support. Section 713 of the Financial…”

“In June, the House passed H.R. 10, the Financial CHOICE Act, with overwhelming support. Section 713 of the Financial CHOICE Act contained language to subject the CFPB to the annual congressional appropriations process. Under the Dodd-Frank Act, the CFPB is funded out of the earnings of the Federal Reserve system. In order to obtain funding, the Director need only submit a letter to the Board of Governors and Federal Reserve each quarter certifying the amounts of funds determined by the Director to be reasonably necessary for carrying out the authorities of the Bureau. The Federal Reserve then transfers the stated amount to the Bureau for operations. Basically, the Federal Reserve serves purely as an ATM machine for the CFPB, and neither Congress nor the President has the ability to have any input into the Bureau's funding or oversight of whether that funding is spent effectively. The Bureau's funding is, therefore, different from other regulators that police markets for force and fraud, including the Federal Trade Commission, the Securities and Exchange Commission, Consumer Product Safety Commission, Commodity Futures Trading Commission, and all those which are funded principally through congressional appropriations.…”