St. Louis Federal Reserve President James Bullard on Monday expressed concerns about funding for the consumer protection office created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
"The amount of money allocated in the law is not based on a careful assessment of what the needs of the bureau will be as it attempts to fulfill the mandate of the Congress," Bullard told a conference at the St. Louis Fed.
Bullard warned there are no means changing these amounts going forward.
"The law requires that the equivalent of 10 percent of Federal Reserve System expenses be transferred to the CFPB in 2011, 11 percent in 2012, and 12 percent in 2013, where it will stay fixed in perpetuity," he said. "I am concerned about this method of funding for the bureau."
While the Dodd-Frank financial reform bill created the consumer protection agency as an independent bureau housed within the Federal Reserve, Bullard noted that the Fed's only real engagement with this independent bureau is to fund it.
"The legislation states that the CFPB is not to report to the Board of Governors of the Federal Reserve System, or to anyone else within the Federal Reserve," he added.
Bullard made no remarks about the state of the economy or the Fed's controversial second round of quantitative easing.
by RTT Staff Writer
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