Last year, the President signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act, which established the new consumer bureau. The central idea behind the creation of the CFPB was the need to increase accountability by consolidating core consumer financial protections that were scattered across government. Previously, seven different federal agencies were responsible for consumer financial protection, but none of those agencies viewed consumer financial protection as their top priority – and none was sufficiently accountable for getting the job done. Moving forward, the CFPB will serve as a cop on the beat dedicated to making the markets for consumer financial products and services work for American families.
Under the Dodd-Frank Act, the CFPB is funded by transfers from the Board of Governors of the Federal Reserve System. The CFPB can request funds from the Federal Reserve that are reasonably necessary to carry out its consumer financial protection functions, but the CFPB’s funding from the Federal Reserve is capped at a pre-set percentage of the total operating expenses of the Federal Reserve, subject to an annual adjustment. To date, the CFPB has requested two funding transfers from the Federal Reserve for a total of just under $33 million.
The President’s budget includes personnel projections showing that the CFPB expects to hire several hundred employees over the course of 2011 and 2012. Additionally, the CFPB expects to receive staff transferred from six of the federal agencies that will be transferring consumer financial protection functions to the consumer bureau. The CFPB’s personnel needs span a range of areas, but we expect some of the biggest resource requirements to be in enforcement and examination – cops on the beat – and consumer complaints.
You can read more about the CFPB’s responsibilities here and about the CFPB budget and . Additionally, the CFPB is working to put together more information about our funding and expenses to be posted to the website in the coming weeks.