Progress in House Towards Independent Inspector General For CFPB

The U.S. House of Representatives Committee on Financial Services held a session yesterday for the markup of H.R. 957, the “Bureau of Consumer Financial Protection-Inspector General Reform Act of 2015.” The Bill is sponsored by Rep. Steve Stivers (R-OH), and would create an independent Inspector General (IG) for the Consumer Financial Protection Bureau (CFPB). Currently, the IG who oversees the CFPB also oversees the Federal Reserve. According to a comment during Tuesday’s semi-annual hearing of the same Committee with Director Cordray, this is unusual, as most federal agencies have their own IG.

Stivers argues that the current IG is stretched too thin, and is unable to provide adequate oversight. He sights delays in audits and evaluations, including – as of May 2014 – 35 delays on fifteen reports.

The ranking Democrat on the Financial Services Committee, Rep. Maxine Waters (D-CA), responded that she has no problem with the concept of an independent IG for the CFPB. While she also expressed confidence in Directory Cordray, adding that she feels he has been open and transparent, she said that she agrees with Stivers. Her concern is that she doesn’t want to see the appointment be held up in the Senate confirmation process, and that there are details – especially related to the funding stream for the position – that need to be resolved. She expressed confidence, however, that these details could be worked out.

In a rare instance of apparent bi-partisanship, Rep. Waters and Rep. Stivers appeared to be in agreement that funding independence for the CFPB IG is essential, and committed to work through the details together. The Bill passed the committee with a 56-3 vote.

insideARM Perspective

While this is just a step in a process on what seems like a mundane matter, it’s an interesting part of the broader conversation (largely bi-partisan fight) about CFPB governance and the power of the agency.