Lafayette Reporter

Sen. John Kennedy (R-La.), a member of the Senate Banking and Appropriation Committees, has joined Sen. Bill Hagerty (R-Tenn.) in introducing the Consumer Financial Protection Bureau (CFPB) Accountability Act, aimed at increasing fiscal accountability for the CFPB.

Currently, the Federal Reserve funds the CFPB, allowing it to operate without direct fiscal oversight from Congress. This arrangement has raised concerns about accountability to American taxpayers.

“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.

During a Senate Banking Committee hearing, Kennedy questioned CFPB Director Rohit Chopra regarding the bureau’s funding structure in light of the Supreme Court’s decision in Consumer Financial Protection Bureau v. Community Financial Services Association of America. The Court ruled that the CFPB's funding mechanism, which allows it to draw from the Federal Reserve’s combined earnings, complies with 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,” replied Chopra.

“It’s not a theory. It’s a congressional statute,” responded Kennedy.

The proposed CFPB Accountability Act would require Congress rather than the Federal Reserve to fund the Bureau through an 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 American people’s elected representatives is unacceptable. Americans deserve to have far greater input in this agency,” said Hagerty.

The legislation has garnered support from 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.).