Sen. John Kennedy (R-LA) recently sounded off on Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra during a Wednesday congressional hearing. The Louisiana Republican suggested the agency was operating beyond its legal authority.
Per the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB is required to operate using funds “combined earnings of the Federal Reserve System.” According to Kennedy, the Federal Reserve has not sustained any earnings in almost two years, suggesting the agency is “operating illegally.”
The GOP congressman stated, “For the longest time, the Federal Reserve was earning money, but that stopped in September 2022. Now they are losing money. They don’t have any earnings. They’re no longer transferring earnings to the general fund, and the Supreme Court based its decision on saying, this funding scheme is Constitutional under the appropriations clause, by saying that these earnings would go to the general fund from the Federal Reserve so getting them directly from the general fund is no big deal.”
Kennedy pressed Chopra as to how the CFPB was currently “entitled” to any money. “How are you entitled to any money right now?” he asked. “The Federal Reserve doesn’t have any earnings.” The director claimed that Kennedy’s assertion is a “theory,” to which Kennedy asserted it was a “congressional statute.”
Chopra continued, “You raise the difference between revenue and net income. There are other places throughout our laws. I can tell you we’ve looked at this issue. We do believe wholeheartedly everyone is complying with the statue.”
He further suggested that the Federal Reserve has been earning money, disputing Kennedy’s claims. Chopra also disputed that the Federal Reserve has not had any earnings since September 2022. “I know you don’t like to hear this, but the law is the law. You’ve been operating illegally,” Kennedy maintained. “No, that’s not true, sir,” Chopra responded.
The Louisiana Republican doubled down on his claims that the Federal Reserve is not earning money, emphasizing that the central bank is losing money. “We didn’t say revenue in the statute, we said earnings,” the Kennedy said. “How can you possibly argue that the Federal Reserve has had earnings? They’re losing money.” Chopra answered the senator, “I’m happy to discuss this with you, but we have looked at this theory before.” Watch the heated exchange below:
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