House Financial Services Committee Chairman Jeb Hensarling is questioning whether the Federal Reserve Board can transfer funds to the Consumer Financial Protection Bureau if the agency is without an appointed director.
Earlier this year, Richard Cordray was reappointed as director of the CFPB by President Obama. A federal appeals court decision then invalidated several recess appointments.
"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," writes American Banker's Victoria Finkle.
"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."
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