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Testifying before the House Committee on Oversight and Government Reform on Tuesday, Sen. Mike Lee (R-Utah) said that the new Consumer Financial Protection Bureau, which is funded directly by the Federal Reserve with no congressional oversight and to which President Barack Obama appointed a director without seeking the Senate confirmation required by the U.S. Constitution, represents the sort of unaccountable system of government “historically reserved for despots.”
Lee said, “Because this position is embedded within the Federal Reserve, because the Federal Reserve bank is not in a sense, in a literal sense, in a traditional sense, a government agency but rather a private for-profit corporation, it’s not an entity that Congress controls in the sense of controlling its purse strings. That is a significant concern.”
Committee Chair Rep. Darrell Issa (R-Calif.) followed up on the unique funding of the CFPB: “So you had no other way to ask for reform, consideration or anything else other than this confirmation. It was an unusual situation in which one of the ordinary powers of the House and the Senate is to ‘not fund’ something that a previous Congress has chosen to do, but in the case of the CFPB that is not the case, is that correct?”
“That is correct and in that respect it enjoys an unusual degree of insulation from the normal controls on any government and that degree of insulation has historically been reserved for despots,” Lee replied.
“Good word,” Issa responded.
The committee met Wednesday to examine the legal and policy implications of President Obama's recess appointments to the CFPB and the National Labor Relations Board.
Sen. Lee and others have challenged Obama’s recess appointments as unconstitutional. Lee has said he would stop working with the Obama administration on the approval of any other nominees until the president rescinds the recess appointments of Cordray and three people to the National Labor Relations Board. See Video Here