It’s clear that the Consumer Financial Protection Bureau and its behavior elicit strong opinions from Capitol Hill and beyond.
Earlier this month, House Financial Services Committee Chairman Jeb Hensarling, R-Texas, called the CFPB the “single most powerful and least accountable Federal agency in all of Washington.” Hensarling’s colleague, Rep. Randy Neugebauer, R-Texas, Chairman of the Financial Services Subcommittee on Financial Institutions and Consumer Credit, recently suggested that the CFPB operates with a “lack of transparency and lack of accountability.”
And now, one U.S. Senator is calling the CFPB a “rogue agency” that needs to be seriously reined in.
“The reckless Consumer Finance Protection Bureau was spawned from the disastrous Dodd-Frank financial regulation law,” Sen. David Perdue, R-GA, said.
“Right now, the CFPB is a rogue agency that dishes out malicious financial policy and creates new rules and regulations without any oversight from Congress,” Perdue added. “On top of that, the agency itself has failed to operate within its own budget and proven it is more concerned with preserving its own power than protecting the public.”
Perdue is seeking to change all of that by introducing a budget amendment to make the CFPB subject to the Congressional appropriations process. “Currently, the CFPB operates under the Federal Reserve and is unaccountable to Congress,” Perdue’s office said in a release.
The CFPB has run afoul of more than just lawmakers in recent months. Last week, the CFPB chose to move forward with its plan for opening its consumer complaint database to the public despite numerous objections from the mortgage finance industry.
The CFPB also engendered negative reaction when it released its its new borrower education tool earlier this year. Included among the tool is the Rate Checker. In its beta release, this tool is supposed to help consumers understand what interest rates may be available to them by using the same underwriting variables that lenders use on their internal rate sheets.
“In other words, we are giving consumers direct access to the same type of information that the lenders themselves have,” said CFPB Director Richard Cordray previously.
David Stevens, president and CEO of the Mortgage Bankers Association, told HousingWire that the release of the rate checker tool was disappointing.
“It’s actually disappointing the bureau would put this out,” Stevens said. “I’m not a CFPB knee jerk. They do a lot of good and while I think things can be improved, we’re on board with them. But this wasn’t well thought out.”
Despite negative reaction from the industry, the CFPB said it was not going to take down the rate checker.
“The Rate Checker is an educational tool, and part of a larger suite of tools to help consumers be more informed and effective mortgage shoppers. The Rate Checker does not connect consumers with lenders,” a spokesperson for CFPB told HousingWire in January.
“As explained on the website, interest is only one of many costs associated with getting a mortgage. Before making a final decision, consumers should compare Good Faith Estimates from multiple lenders, which include all of these costs,” the spokesperson said.
In addition to those issues, the CFPB’s budget has also irked many in Congress.
“The bureau regrettably remains unaccountable to the American people,” Hensarling said earlier this month. “That is why we need the CFPB on budget and led by a bipartisan commission; mere testimony is not the equivalent to accountability.”
Bringing the CFPB under Congressional oversight would be a step in the right direction, Perdue said.
“Ultimately, I believe the CFPB should be dismantled, but an important first step is bringing it into the light for the American people to see its harmful effects on consumers,” Perdue added.