By Brandon Moseley
Alabama Political Reporter
Senator Richard Shelby accuses Obama Administration of operating the Consumer Financial Protection Bureau without Congressional accountability. At a Senate Committee Hearing on the new CFPB, Senator Shelby said the CFPB headed by Richard Cordray, “is inconsistent with our Constitutional values to have so much power vested in the hands of one bureaucrat without adequate supervision by the elected-representatives of the American people.”
Senator Shelby said that “the Dodd-Frank Act intentionally designed the Bureau to be free of even the most basic checks and balances.” “Unfortunately, the President has now circumvented one of the only remaining checks with his recess appointment of Mr. Cordray. I suspect that the Supreme Court will ultimately decide the Constitutionality of the President’s action. Until then, Mr. Cordray has indicated that he will exercise the full authorities of the Bureau.” “Because of the structure of the Bureau, this means Mr. Cordray will have unfettered power over the operation of the Bureau. His decisions alone will determine how the Bureau approaches its work. If he so chooses, he does not have to answer to anyone. This is not a choice any bureaucrat should have.” “Since his appointment, Mr. Cordray has indicated that he intends to proceed cautiously and prudently when he exercises his authority. The real test, however, will be whether this caution finds its way into the Bureau’s actions. Unfortunately, the Bureau’s early history is not encouraging.”
Senator Shelby said, “The Bureau is budgeted to receive a total of $329 million in funds from the Federal Reserve Board this year. This could grow to well over a half a billion dollars as early as next year. By design, these payments are made directly to the Bureau without any oversight through the congressional appropriations process.” “It is also my understanding that the Bureau has already hired 800 people, and it has been reported that the Bureau hopes to hire as many as 1,000 people by the end of this year, some making more than $225,000 per year. How have my Democrat colleagues in the Senate responded to this incredible bureaucratic expansion? They have resisted every Republican effort to make the Bureau more accountable to the American people by changing its structure. To make things worse, they have also cut this Committee’s funding by 25% making it even more difficult to oversee these massive bureaucracies that are growing in power and size under Dodd-Frank.”
Shelby also accused the CFPB of passing regulations without accountability to the public: “the Bureau has repeatedly evaded the intent of the APA by issuing “interim final rules” without asking for public comment before the rules become effective. Consequently, the Bureau has been able to impose costly regulations on the American economy without providing the American people with any opportunity for comment.”
Sen. Shelby said that the CFPB’s recently implemented remittance transfers rule alone “will require more than 7.6 million hours. That means more than 3,800 full-time employees will be required to work on compliance for this single rule. Rather than conduct a cost-benefit analysis to determine if this rule is justified, the Bureau has indicated that it will impose the rule and examine its impact after the fact.”
Senator Shelby said that federal bureaucracies were growing too large and too unaccountable. “As I have said many times, things are not getting better, just bigger and more unaccountable. In fact, our financial regulators have become bureaucracies that are now too big to oversee and it is only getting worse under Democrat rule” Senator Shelby said. “The Consumer Bureau is only the most recent iteration of the same problem.”
The Consumer Financial Protection Bureau was created by the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010 when the Democratic Party controlled both Houses of Congress. The 2010 election gave the Republicans control of the House of Representatives and increased the size of the Republican minority in the United States Senate. Republicans led by Senator Shelby blocked the confirmation of President Barack H Obama’s appointee, Richard Cordray to be the first director of the new CFPB in attempt to get concessions from the administration on the powers of CFPB. Defying the Congress, President Obama appointed Cordray over the holidays any way claiming it was a recess appointment. Senate Republicans have called that appointment unconstitutional.
U.S. Senator Richard Shelby is the ranking Republican on the Senate Committee on Banking, Housing and Urban Affairs.