According to a recent financial statement issued by the Federal Reserve, spending by the Consumer Financial Protection Bureau rose by nearly half, to $563 million in 2013 from $385 million in 2012. The audited Federal Reserve statement can be found here.
Under the Dodd-Frank, Congress has no authority over the CFPB’s budget. Instead, the statute has established the CFPB as an office of the Federal Reserve, which is independent of the remainder of the government. Dodd-Frank set the bureau’s funding as a percentage of the Federal Reserve’s operating expense. That budget was 10 percent of Federal Reserve expenses in fiscal 2011, rising each year to 12 percent for fiscal 2014 and beyond. In fiscal 2013, the maximum cap equaled $598 million. In reality, the CFPB received $518.4 million. The Federal Reserve’s total budget increased just 8 percent over the same span. Indeed, the funds allocated for the CFPB are higher than the entire operating expenses listed for the Federal Reserve (salaries, benefits, etc) and represent almost 80 percent of the budget allocated to currency management, which is the Federal Reserve’s reason to exist. The CFPB also collected nearly $50 million in civil penalties in 2013. Nonetheless, the report notes that the CFPB accrued a liability of $1.84 million as of Dec. 31, 2013 that will be applied to the 2014 budget.
The Federal Reserve’s report notes that under Dodd-Frank the financial statements of the CFPB are not to be consolidated with those of the Federal Reserve. Accordingly, the report does not include any financial data of the CFPB other than its budget. Details of expenditures by the CFPB must be obtained from the CFPB annual report, available here.
One of the major expenses for the bureau in fiscal 2013 was $145 million paid toward the costs of renovating a building near the White House for use as the CFPB’s headquarters. Controversy over the remodeling expense was reported here. The CFPB has also come under fire for high salaries and bonuses as well as dubious expenditures.
One leading critic of the CFPB is Representative Jeb Hensarling (R-Texas) who is chairman of the House Financial Services Committee. He has called the CFPB “[f]undamentally unaccountable to Congress because the bureau’s funding is not subject to” the Congressional appropriations process. The budget report comes amid Congressional calls for a restructuring of the CFPB and more accountability of its activities. Last month, the House of Representatives passed a bill 232-182 that would bring CFPB spending directly under congressional control. The bill is not expected to see the light of day in the Senate.