Federal Reserve Chair Janet Yellen stopped by for her semi-annual chat with the House Financial Services Committee this week and things didn’t go quite as smoothly as such a periodic review generally does. One of the members had a few questions for her regarding oversight of the newest agency under her control, the Consumer Financial Protection Bureau. Specifically, they wanted to know about the budget going to the bureau, who reviewed it, who approved it and if there was any control over what was spent. Her answers were, shall we say, less than inspiring. (Daily Caller)
The video is even worse than the transcript makes it sound.
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.
You’d think she might be doing some checking into what’s going on at the CFPB, particularly considering how often they wind up in court. They recently exacted a huge settlement from Toyota because of racial disparities detected in how much interest was being charged to black and Asian borrowers. The potential problem there is that Toyota was charging everyone the same interest rate based on their credit rating with no racial demographic information available. The difference was coming from a “mark-up” increase in the rates being charged by the local dealers.
This continues a pattern which began when the agency was first set up and they grossly overran their own estimated cost of constructing their headquarters. With nobody keeping a close enough eye on the taxpayers’ cash, money just has a tendency to disappear. After their shaky start, one might imagine that Janet Yellen would be keeping a closer eye on their books, but apparently she’s not even sure she has the power to do that.