Consumer watchdog fends off Republican attacks

The Consumer Financial Protection Bureau (CFPB) has returned more than $10 billion to consumers who were scammed since the watchdog agency opened its doors four years ago.

CFPB Director Richard Cordray revealed the results of the relief the agency has provided to more than 17 million consumers on Wednesday in his semi-annual report to Congress.

“Congress created this agency in response to the financial crisis with the purpose and sole focus of protecting consumers in the financial marketplace,” Cordray told lawmakers. “We understand our responsibility to stand on the side of consumers and ensure they are treated fairly.”

Cordray is on the hill this week defending the CFPB from Republicans who are seeking to weaken the consumer watchdog. He testified Wednesday before the Senate Banking Committee.

The creation of the CFPB stems from the Dodd-Frank financial reform laws passed five years ago this month. The Obama administration and Democrats defend the agency’s work, but Republicans have long decried its “lack of accountability.”

GOP lawmakers would like to create a board to oversee the CFPB, rather than a single director. They would also like more authority over the agency’s budget.

Senate Banking Chairman Richard Shelby (R-Ala.) warned Wednesday at the hearing that “the time will come” for Congress to restructure the CFPB.

“Unfortunately, Congress does not have control over how the bureau spends its funds because the CFPB operates outside of the appropriations process,” Shelby said at the hearing. 

“Because Congress cannot tighten the financial reins when budgeting issues arise, the bureau’s current structure makes meaningful congressional oversight very difficult,” he continued.

“By putting the bureau through the appropriations process and establishing a board of directors, it would resemble other independent agencies and provide Congress with the ability to conduct meaningful oversight,” Shelby added.

But Sen. Sherrod Brown (Ohio), the top Democrat on the committee, warned such moves would “cripple” the CFPB.

“I will continue to fight all of these attempts to destabilize the CFPB,” Brown said at the hearing. “Our consumers deserve a strong watchdog that can do its job independently, and it’s my job to make sure that happens.”