Agency Audit: Reviewing CFPB Financial Reporting & Transparency (EventID=117128)

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Connect with the House Financial Services Committee Get the latest news: https://democrats-financialservices.house.gov/ Follow us on Facebook: https://www.facebook.com/HouseFinanci... Follow us on Twitter: https://twitter.com/FSCDems ___________________________________ On Tuesday, April 16, 2024, at 2:00 p.m. (ET) Subcommittee on Financial Institutions and Monetary Policy Chair Congressman Barr and Subcommittee Ranking Member Congressman Foster will host a hearing entitled, “Agency Audit: Reviewing CFPB Financial Reporting & Transparency." ___________________________________ Witnesses for this one-panel hearing will be: • Alicia Puente Cackley, Director, Financial Markets and Community Investment, U.S. Government Accountability Office • Baird Webel, Specialist in Financial Economics and Acting Research Manager for Executive Branch Operations ___________________________________ Background The Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) established the Consumer Financial Protection Bureau (CFPB) and authorized the Comptroller General of the United States to annually audit financial transactions of the CFPB in accordance with generally accepted government audit standards. CFPB financial statements, according to the Dodd-Frank Act, are to be statements of: (i) assets and liabilities and surplus or deficit; (ii) income and expenses; and (iii) sources and application of funds. The Comptroller General is required to submit to Congress a report of each annual audit of the CFPB that is conducted. The Dodd-Frank Act requires that the Board of Governors of the Federal Reserve system transfer to the CFPB, from the combined earnings of the Federal Reserve System, the amount determined by the Director of the CFPB to be “reasonably necessary” to carry out the authorities of the CFPB under Federal consumer financial law. The Dodd-Frank Act requires that the financial statements of the CFPB not be consolidated with the financial statements of either the Board of Governors of the Federal Reserve System or the Federal Reserve System. In addition to audited financial statements, the CFPB publishes a five-year strategic plan, along with unaudited budget and performance documents. Legislation Attached H.J. Res. 122, a resolution providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Consumer Financial Protection Bureau relating to credit card penalty fees (Regulation Z). The resolution was introduced on March 29, 2024, by Rep. Andy Barr (R-KY), and has 13 cosponsors, including Rep. Blaine Luetkemeyer (R-MO), Rep. Ann Wagner (R-MO), Rep. Bill Posey (R-FL), Rep. Pete Sessions (R-TX), Bill Huizenga (R-MI), Steve Womack (R-AR), Randy Weber (R-TX), Roger Williams (R-TX), Zach Nunn (RIA), Byron Donalds (R-FL), Scott Fitzgerald (R-WI), William Timmons (R-SC), and Dan Meuser (R-PA). The resolution would nullify the CFPB’s March 2024 “credit card late fees rule,” which is part of the Biden Administration’s war on “junk fees” to score political points. The rule, which is harmful to consumers, reduces the safe harbor dollar amount that credit card issuers can charge cardholders who fail to make their minimum payment on time from $32 to $8 and eliminates an automatic annual inflation adjustment of the cap. The CFPB’s rule would disincentivize on-time payments, encouraging consumers to carry card balances and incur interest charges, creating scope for detrimental financial behavior. The CFPB’s rule would also shift the higher costs associated with delinquent customers onto responsible customers who pay on time via increased fees or interest rates, subsidizing irresponsible financial behavior at the expense of responsible customers. The CFPB rule is based on “junk economics,” including essentially denying that late fees serve partly as deterrents to repeated late payments—deterrents that Federal government agencies, such as the Internal Revenue Service, themselves rely upon to deter late payments. ___________________________________ Hearing page: https://democrats-financialservices.house.gov/events/eventsingle.aspx?EventID=411342