Watch Kennedy’s full remarks here.
WASHINGTON – Sen. John Kennedy (R-La.), a member of the Senate Banking and Appropriation Committees, joined Sen. Bill Hagerty (R-Tenn.) in introducing the Consumer Financial Protection Bureau (CFPB) Accountability Act to bring fiscal accountability to the CFPB.
Currently, the Federal Reserve is responsible for funding the CFPB. This unusual arrangement allows the CFPB to avoid fiscal accountability to the American people through their elected officials in Congress.
“The bureaucratic state is always trying to grab more power and minimize its accountability. CFPB bureaucrats don’t rely on Congress for funding—which means the bureau isn’t accountable to American taxpayers in key ways. That needs to change,” said Kennedy.
The senator also questioned CFPB Director Rohit Chopra during a Senate Banking Committee hearing about the CFPB’s funding structure in light of the Supreme Court’s decision in Consumer Financial Protection Bureau v. Community Financial Services Association of America. In that case, the Supreme Court held that CFBP’s funding scheme, which allows it to draw from the Federal Reserve’s combined earnings, satisfies the Constitution’s Appropriations Clause.
“Now, for the longest time, the Federal Reserve was earning money, but that stopped in what, September of 2022? Now, they are losing money. They don't have any earnings. . . . And the Supreme Court based its decision on saying that this funding scheme is constitutional under the Appropriations Clause by saying that these earnings would go to the general fund from the Federal Reserve, so getting them directly from the general fund is no big deal. How are you entitled to any money right now? The Federal Reserve doesn't have any earnings,” Kennedy asked.
“Well, we’ve heard of this theory. I think it’s one of the latest,” said Chopra.
“It’s not a theory. It’s a congressional statute,” said Kennedy.
The CFPB Accountability Act would ensure that the CFPB is accountable to taxpayers by requiring Congress, not the Federal Reserve, to fund the Bureau’s budget through the appropriations process.
“The CFPB must be required to go through the regular congressional appropriations process to ensure public accountability. As a lifelong businessman, protecting consumers in the financial marketplace is important, but handing vast government regulatory power to an agency that is not accountable to the American people’s elected representatives is unacceptable. Americans deserve to have far greater input in this agency,” said Hagerty.
Sens. Katie Britt (R-Ala.), Kevin Cramer (R-N.D.), Mike Crapo (R-Idaho), Cynthia Lummis (R-Wyo.), Mike Rounds (R-S.D.), Tim Scott (R-S.C.) and Thom Tillis (R-N.C.) also cosponsored the legislation.
Kennedy’s full exchange with Chopra is here.
