Federal Reserve Board Chairwoman Janet Yellen oversees the country’s $16.7 trillion economy, but she appears clueless about the Consumer Financial Protection Bureau, a small $620 million financial regulatory agency that operates within her organization.
Yellen was asked Feb. 10, 2016, during her semi-annual presentation before House Financial Services Committee, if the Federal Reserve Board approves the CFPB’s budget. Throughout the two-minute ordeal, Yellen looks off camera for answers from her aides about her own Federal Reserve and the CFPB.
The CFPB was birthed in 2010 by President Barack Obama and Democratic Sen. Elizabeth Warren to regulate an array of financial service companies, most already overseen by other federal agencies. Obama and Warren purposely put the bureau under the Federal Reserve Board to exempt it from congressional budget and management oversight.
Yellen looked befuddled when Republican Rep. Andy Barr, who sits on the committee, confronted her with a series of simple questions about the CFPB. Barr first asked Yellen if the Federal Reserve approves the CFPB’s budget.
After seven silent seconds as Yellen sought help, she haltingly said, “I’m not sure.” then added, “I mean we fund the bureau’s budget.”
“Do you approve the budget?” Barr asked.
Again, Yellen was stumped, and she looked left and right for staff assistance. “I don’t think,” she said uncertainly. “I think the answer is no,” she continued as she shoved personal items into a hand bag preparing to leave the hearing room.
“Can you veto specific allocation requests,” Barr then asked.
“I…I don’t think so,” the Fed chief replied.
Barr asked if the Federal Reserve is prepared to act if CFPB exceeded its budget cap.
“I mean, we abide by the law,” Yellen said, adding “I need to look at the details of what our obligations and limits are. I need, I need to look, I need to look at that more fully.”
That response prompted Barr to observe that “well you see this is the problem we have. We don’t have appropriations control over the Bureau. And so they get their funding from you. We would hope that they would be at least be accountable to you as the funding source.”
After the exchange, The Daily Caller News Foundation caught up with Barr.
“Well, it’s stunning and disappointing that Janet Yellen was apparently wholly unfamiliar with the bureau’s budget,” Barr told TheDCNF. “But just generally, she exhibited no oversight whatsoever of this bureau.”
Barr said it was “alarming” that Yellen “herself would have so little direct information about the spending and the budget of the bureau. This agency is the least accountable, least transparent agency in the entire federal government.”
Barr is sponsoring the “Taking Account of Bureaucrat’s Spending Act,” which is intended to keep tabs on bureaucrats, but one of its provisions would also subject the bureau to the same congressional appropriations process that applies to all other government agencies.
Barr charged the entire CFPB arrangement is “inconsistent with our democratic principles.”
“To have an agency that’s so completely insulated from accountability is inconsistent with the very basic democratic principles and constitutional principles that govern our country,” he said.
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