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Abilene Reporter-News - Neugebauer Questions Consumer Bureau's Transparency About its Spending

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By John Mangalonzo

U.S. Rep. Randy Neugebauer is raising concerns about what he calls the lack of transparency of the Consumer Financial Protection Bureau, an agency created through the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Neugebauer, a staunch critic of the agency, questioned the bureau's director, Richard Corday, during a congressional hearing Thursday morning of the Committee on Financial Services regarding the bureau's semiannual report.

Neugebauer's office sent a statement and a video of the hearing to the Reporter-News. The Lubbock Republican, whose district includes Abilene, is chairman of the House Subcommittee on Oversight and Investigations of the House Committee on Financial Services.

Neugebauer asserted in his address to the committee that the bureau can spend more than $550 million each year from its budget "and no one has authority to prevent those transfers," not even the President's Office of Management and Budget.

"The justifications for those transfers are slim at best," Neugebauer told the committee. "Transfer requests can be vague, one-page letters with no details on how the money being requested will be spent."

Neugebauer said he has never seen financial operating and performance plans from the bureau. The agency, he said, did not always respond to requests for such documents "and when it did, the responses were unsatisfactory at best."

Corday, during past appearances in front of the committee stressed the agency's commitment to transparency, but Neugebauer said "the bureau's activities haven't borne out that commitment."

The agency has $40 million allocated to land and structures for fiscal year 2013 and Neugebauer said the subcommittee's request for a detailed report on the bureau's building plans was denied.

Neugebauer also scrutinized the bureau's salaries, saying about 60 percent of the bureau's 958 employees make more than $100,000 per year, including Corday's secretary who is getting paid $165,139 per year.

"So I find it ironic that an agency designed to protect consumers has so little accountability to taxpayers," Neugebauer said. "The bureau can spend hundreds of millions of dollars with little to no oversight, and every single dollar (they) receive from the Fed is one less dollar that could be used to reduce our debt."

Corday cited they only existed as an agency a year ago and they have responded to the subcommittee's requests "with more information."

"Our budgeting document is growing larger and more fulsome each time in the process," Corday told Neugebauer. "But we're happy and committed to working with you, to make sure you're satisfied."

He said unlike older agencies where documentation has fully developed, the financial protection bureau still is in the process of keeping up with congressional demands.

"We are careful with this process," Corday told the committee. "We take this very seriously; I take them personally."

Michelle Person, spokeswoman for the Consumer Financial Protection Bureau, said the agency has responded to all of Neugebauer's information requests, which included more than a half-dozen between January 2011 and July 2012. Budget information also is posted on the agency's website.

With regards to the salaries, Person said legislation requires them to design pay and benefit programs that are comparable to the Federal Reserve Board.

"We are following congressional intent and attracting experienced and talented staff while assuring comparability with our peer regulatory agencies -- and in compliance with the statutes," Person said in an email. "CFPB's pay design and pay setting methodology places our employees in line with the Federal Reserve Board's average salary for employees with similar skills and experience."

For instance, the Office of the Comptroller of the Currency has 63 percent of its staff earning $100,000 or more and the Federal Deposit Insurance Corporation has 58 percent of its staff making $100,000 or more.

The consumer bureau is the nation's first federal agency focused solely on protecting consumers in the financial marketplace.


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