
The need for accountability also drives well-founded concerns about the bureau itself. During debate on its creation, Senate Republicans sought more accountability. This new bureau has the power to regulate a vast array of financial products and services. Many of these powers were held previously by other federal agencies and subject to oversight because the agency budgets are controlled by Congress. That’s not the case, at all, with the Consumer Financial Protection Bureau. Funding for the bureau flows through the Federal Reserve. The Fed operates independently from the President, as well as Congress, where Americans have a voice through their elected representatives. What’s more, the Federal Reserve is prohibited in the Dodd-Frank law from intervening in the work of the bureau, making it unaccountable even to the Fed. As a result, the Consumer Financial Protection Bureau is able to exercise massive regulatory authority without the checks and balances at the heart of our system of government.
So far, the President’s message is, trust us, we’ll do it right. But the response of the legislative branch and the American people ought to be, trust but verify. Starting with the President’s appointment and continuing with the set-up of any new bureau, accountability must be established.