The independent Office of Inspector General (OIG) for the Federal Reserve System (FRS) and Consumer Financial Protection Bureau (CFPB) is investigating the bureau's workforce reductions and its canceled contracts, according to a letter to Senator Andy Kim, D-NJ, from Acting FRS/CFPB IG Fred Gibson.
Gibson said he already was investigating the workforce reductions at the bureau in response to a letter from Senator Gary Peters, D-Mich. and 15 other Senators. Responding to a call from Kim and Senator Elizabeth Warren, D-Mass., Gibson now has expanded his work to include contracts that have been canceled by the Trump Administration.
The FRS/CFPB IG is somewhat insulated from political pressure. The IG serves the Federal Reserve Board and the CFPB and unlike other IGs, the FRS/CFPB IG is not nominated by the President and confirmed by the Senate. The FRS/CFPB IG is appointed by the Fed Chairman—in this case Jerome Powell.
In April, Peters and the Senators wrote to the FRS/CFPB IG demanding an investigation to ensure the agency is still able to fulfill its functions. Gibson's letter confirms that the IG is investigating the administration's actions at the CFPB. The Government Accountability Office already is investigating attempted firings, stop-work orders, and announcements of dropped lawsuits at the CFPB.
"As Trump dismantles vital public services, an independent OIG investigation is essential to understand the damage done by this administration at the CFPB and ensure it can still fulfill its mandate to work on the people's behalf and hold companies who try to cheat and scam them accountable," said Senator Kim.
Kim and Warren cited Gibson's independence in making their request to expand the investigation..
Shortly after Gibson responded to Kim's letter, Michael Horowitz was selected as permanent FRS/CFPB IG. Horowitz is the former IG at the Department of Justice.
Aside from the attempted administration cuts, lawmakers on Capitol Hill have included cuts in the CFPB's budget in the large reconciliation bills passed by the House and Senate. Under the just-passed Senate bill, CFPB spending would drop from a maximum of 12% of the Federal Reserve's inflation adjusted profits in 2009 to 6.5% of those profits.
The House-passed version of the reconciliation measure would set funding for 2025 at no more than $249 million, with an annual adjustment for inflation.
The House and Senate now will have to reconcile differences between the two bills.
The administration's actions at the CFPB also are tied up in court. The U.S District Court for the District of Columbia has issued a temporary injunction, essentially stopping all administration actions aimed at dismantling the bureau. The Federal Appeals Court for the District of Columbia has temporarily supported that injunction.
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