§5497 Funding; Penalties and Fines

Summary

The Federal Reserve must send money each year (or each quarter) to the Bureau so the Bureau can do its work. The Bureau Director decides how much is reasonably needed and that amount is taken from the Fed’s combined earnings. Transfers start on the designated transfer date and then happen every quarter. However, each year the transfer cannot be more than a set share of the Fed’s 2009 reported operating expenses: 10% for fiscal year 2011, 11% for fiscal year 2012, and 6.5% for fiscal year 2013 and after. The dollar amount for the 6.5% cap is adjusted each year using the change in the employment cost index for state and local government workers for the 12 months ending September 30 before the transfer. Money the Fed gives the Bureau this way cannot be reviewed by the House or Senate Appropriations Committees. From July 21, 2010 until the transfers begin, the Fed must give the Bureau the amount the Secretary estimates is needed for that period. The Bureau must keep clear financial plans and reports and share its plans and quarterly reports with the Office of Management and Budget. The Bureau must make yearly financial statements, run financial systems that follow federal rules, and tell the Comptroller General whether its internal financial controls meet federal standards (under section 3512(c) of title 31). The Government Accountability Office must audit the Bureau every year, get full access to records, and send the audit report to Congress, the President, and the Bureau. The law creates the “Bureau of Consumer Financial Protection Fund” at a Federal Reserve bank to hold the transfers, and the Bureau can ask the Fed to invest spare money only in U.S. government obligations; interest and sale proceeds go back into the fund. Money in that fund is available to the Director right away and stays available until spent. The law also creates a separate “Consumer Financial Civil Penalty Fund” to hold civil penalties; those funds can pay victims or, if victims cannot be found, support consumer education and financial literacy. If the Director finds the fund won’t be enough, the Director can report that to the President and the Appropriations Committees. If that happens, Congress is authorized to provide $200,000,000 for each fiscal year 2010, 2011, 2012, 2013, and 2014, subject to normal apportionment rules (section 1517 of title 31) and restrictions. The Director must report yearly to the Appropriations Committees about the Bureau’s finances and use of any appropriated funds.