WASHINGTON — House Financial Services Committee Chairman Jeb Hensarling is asking whether the Consumer Financial Protection Bureau can request funds from the Federal Reserve Board without an appointed director.
The concerns follow a federal appeals court decision earlier this year that invalidated several recess appointments President Obama made the same day he named Richard Cordray director of the CFPB. No court has ruled on the lawfulness of Cordray's appointment, but Hensarling argued in a letter Friday to Fed Chairman Ben Bernanke that the earlier court ruling casts doubt on Cordray's position and thus consumer agency's ability to obtain funding. The agency is not subject to congressional appropriations and instead receives a transfer from the Fed.
"Because it appears there is not presently a validly appointed director of the CFPB, I question the circumstances under which the Board may lawfully fund the CFPB's operations," the Texas Republican said in the March 8 letter. "I believe that decisions to fund the CFPB must be scrutinized by, and traceable to, a properly appointed officer of the United States, consistent with Dodd-Frank's intent and the constitutional requirement that significant authority of the United States be exercised only by such officers."