[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                    HOLDING THE BIDEN ADMINISTRATION.
                   ACCOUNTABLE FOR WASTEFUL SPENDING .
                        AND REGULATORY OVERREACH

=======================================================================

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON OVERSIGHT
                           AND INVESTIGATIONS

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 8, 2023

                               __________

       Printed for the use of the Committee on Financial Services

                            Serial No. 118-6
                            
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


                               __________

                                
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
52-362 PDF                   WASHINGTON : 2023                    
          
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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

               PATRICK McHENRY, North Carolina, Chairman

FRANK D. LUCAS, Oklahoma             MAXINE WATERS, California, Ranking 
PETE SESSIONS, Texas                     Member
BILL POSEY, Florida                  NYDIA M. VELAZQUEZ, New York
BLAINE LUETKEMEYER, Missouri         BRAD SHERMAN, California
BILL HUIZENGA, Michigan              GREGORY W. MEEKS, New York
ANN WAGNER, Missouri                 DAVID SCOTT, Georgia
ANDY BARR, Kentucky                  STEPHEN F. LYNCH, Massachusetts
ROGER WILLIAMS, Texas                AL GREEN, Texas
FRENCH HILL, Arkansas                EMANUEL CLEAVER, Missouri
TOM EMMER, Minnesota                 JIM A. HIMES, Connecticut
BARRY LOUDERMILK, Georgia            BILL FOSTER, Illinois
ALEXANDER X. MOONEY, West Virginia   JOYCE BEATTY, Ohio
WARREN DAVIDSON, Ohio                JUAN VARGAS, California
JOHN ROSE, Tennessee                 JOSH GOTTHEIMER, New Jersey
BRYAN STEIL, Wisconsin               VICENTE GONZALEZ, Texas
WILLIAM TIMMONS, South Carolina      SEAN CASTEN, Illinois
RALPH NORMAN, South Carolina         AYANNA PRESSLEY, Massachusetts
DAN MEUSER, Pennsylvania             STEVEN HORSFORD, Nevada
SCOTT FITZGERALD, Wisconsin          RASHIDA TLAIB, Michigan
ANDREW GARBARINO, New York           RITCHIE TORRES, New York
YOUNG KIM, California                SYLVIA GARCIA, Texas
BYRON DONALDS, Florida               NIKEMA WILLIAMS, Georgia
MIKE FLOOD, Nebraska                 WILEY NICKEL, North Carolina
MIKE LAWLER, New York                BRITTANY PETTERSEN, Colorado
ZACH NUNN, Iowa
MONICA DE LA CRUZ, Texas
ERIN HOUCHIN, Indiana
ANDY OGLES, Tennessee

                     Matt Hoffmann, Staff Director
              Subcommittee on Oversight and Investigations

                   BILL HUIZENGA, Michigan, Chairman

PETE SESSIONS, Texas                 AL GREEN, Texas, Ranking Member
ANN WAGNER, Missouri                 STEVEN HORSFORD, Nevada
ALEXANDER X. MOONEY, West Virginia   RASHIDA TLAIB, Michigan
JOHN ROSE, Tennessee, Vice Chairman  SYLVIA GARCIA, Texas
DAN MEUSER, Pennsylvania             NIKEMA WILLIAMS, Georgia
ANDY OGLES, Tennessee
                            
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    March 8, 2023................................................     1
Appendix:
    March 8, 2023................................................    29

                               WITNESSES
                        Wednesday, March 8, 2023

Bialek, Hon. Mark, Inspector General, Office of Inspector General 
  for the Board of Governors of the Federal Reserve System (Fed) 
  and the Consumer Financial Protection Bureau (CFPB)............     5
Delmar, Richard K., Acting Inspector General, Office of Inspector 
  General, U.S. Department of the Treasury.......................     7
Sharek, Rebecca L., Deputy Inspector General for Audits, 
  Evaluations, and Special Projects, Office of Inspector General, 
  U.S. Securities and Exchange Commission (SEC)..................     8

                                APPENDIX

Prepared statements:
    Bialek, Hon. Mark............................................    30
    Delmar, Richard K............................................    44
    Sharek, Rebecca L............................................    57

              Additional Material Submitted for the Record

Huizenga, Hon. Bill:
    Letter to Hon. Gary Gensler, Chair, U.S. Securities and 
      Exchange Commission, dated March 1, 2023...................   113
Bialek, Hon. Mark:
    Written responses to questions for the record from 
      Representative Barr........................................   115
Delmar, Richard K.:
    Written responses to questions for the record from 
      Representative Barr........................................   117
    Written responses to questions for the record from 
      Representative Sessions....................................   118
Sharek, Rebecca L.:
    Written responses to questions for the record from 
      Representative Meuser......................................   120
    Written responses to questions for the record from 
      Representative Sessions....................................   122

 
                    HOLDING THE BIDEN ADMINISTRATION
                    ACCOUNTABLE FOR WASTEFUL SPENDING.
                        AND REGULATORY OVERREACH

                              ----------                              


                        Wednesday, March 8, 2023

             U.S. House of Representatives,
                          Subcommittee on Oversight
                                and Investigations,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 2:17 p.m., in 
room 2128, Rayburn House Office Building, Hon. Bill Huizenga 
[chairman of the subcommittee] presiding.
    Members present: Representatives Huizenga, Wagner, Mooney, 
Rose, Meuser, Ogles; Green, Horsford, Garcia, and Williams of 
Georgia.
    Ex officio present: Representative Waters.
    Chairman Huizenga. The Subcommittee on Oversight and 
Investigations will now come to order, and I would like to 
welcome everybody.
    Without objection, the Chair is authorized to declare a 
recess of the subcommittee at any time.
    Today's hearing is entitled, ``Holding the Biden 
Administration Accountable for Wasteful Spending and Regulatory 
Overreach.''
    The Chair now recognizes himself for a brief point of 
personal privilege.
    Today's hearing marks the first hearing of our subcommittee 
in the 118th Congress and my first as its chairman. Now, that 
does not mean we have been inactive. It does not mean that we 
have not been doing anything. In fact, we have had a number of 
discussions, letters that have gone out, and conversations 
with, for example, Agency Inspectors General, which actually 
led to this hearing, and so many more to come. And I would like 
to extend a welcome to all of our subcommittee members, both 
the Republicans and the Democrats, and look forward to serving 
with you over the next 2 years.
    Like some of you, this is my first term as a member of the 
Oversight Subcommittee specifically. And while I am no stranger 
to oversight issues, I look forward to learning how we can make 
our government more accountable to the American people and the 
consumers that we serve. I want to be clear. The subcommittee 
will approach oversight in a fair and even-handed manner. That 
being said, I will not hesitate to use my authority as chairman 
to hold regulators accountable, and I certainly am not going to 
shy away from topics that might be sensitive or frankly 
uncomfortable to either side of the aisle. I think that is part 
of our duty. I look forward to working with the ranking member, 
Mr. Green of Texas, as we work to accomplish our shared 
objectives. And I would like to now recognize the ranking 
member for a brief point of personal privilege.
    Mr. Green. Thank you very much, Mr. Chairman. I concur with 
you that many things have been done prior to today, and I would 
like to accentuate the meeting that you and I had; it was very 
beneficial. We have made many agreements. Probably one that you 
and I both understand is that there will be times when we won't 
agree, but we have also agreed that we won't be exceedingly 
disagreeable, and we have agreed that we will meet again. You 
have a great mentor on this subcommittee to assist you_Mrs. 
Wagner is a former Chair, and she and I worked closely 
together. I will look forward to doing a similar thing with 
you, and I would like to welcome all of the members to the 
committee as well.
    And I thank the witnesses for being here.
    And, Mr. Chairman, without question, reservation, or 
hesitation, I am convinced that there will be something that 
you and I will be able to work on together, and I look forward 
to doing that thing as well as many others. I yield back.
    Chairman Huizenga. The gentleman yields back. I appreciate 
that. I now recognize myself for 5 minutes to give an opening 
statement.
    Today's hearing is entitled, ``Holding the Biden 
Administration Accountable for Wasteful Spending and Regulatory 
Overreach.'' Oversight of the Executive Branch is a vital check 
on the President's power, regardless of who occupies the Oval 
Office. In fact, I had a mentor in my first couple of terms 
from Michigan, the lion of the House of Representatives, John 
Dingell, who taught me a number of things. One was the tyranny 
of the vote, which is what we just experienced earlier. It 
doesn't matter what plans you have, it doesn't matter who you 
are with or where you are at, when they ring the bells, we have 
15 minutes to go and perform our constitutional obligation of 
voting on the House Floor. That said, we were delayed a couple 
of minutes because of that today.
    But the other is oversight, and, in fact, I decided that I 
was just going to look up a simple definition of, 
``oversight,'' and this was what popped up on Wikipedia, of all 
things: ``Congressional oversight is oversight by the United 
States Congress over the Executive Branch, including the 
numerous U.S. Federal agencies. Congressional oversight 
includes the review, monitoring, and supervision of Federal 
agencies, programs, and activities, and policy 
implementation.''
    If it is good enough for Wikipedia, it should be good 
enough for us and this committee to know what our lane is here, 
and that is to make sure that we are holding those in the 
Administration accountable. The Inspectors General before us 
today represent four agencies who touch nearly every part of 
our financial system. The work done by your offices is 
paramount to make sure that these agencies stay within the 
bounds Congress established for them.
    In recent years, these regulators have pushed those limits, 
leaving Congress with little or no recourse. In fact, I would 
argue that there is no better example than the Consumer 
Financial Protection Bureau (CFPB). Over a decade ago, as a 
response to the great financial crisis, Congress created the 
CFPB as an Agency charged with protecting consumers. Since its 
inception, the Bureau has grown to radically transform the 
notion of consumer protection, often at the expense of small 
business owners and hardworking Americans, with little to no 
benefit for the actual consumers. I say, ``actual,'' because 
oftentimes these so-called advocates are really ginning up a 
paycheck rather than looking for protection. And now, CFPB 
Director Chopra's strategy of regulation by enforcement has 
left many wondering how one Agency can have so much autonomy 
with virtually no oversight from Congress. Well, we know that 
the courts are weighing in on that at this point.
    Mr. Bialek, you lead a staff that has the difficult job of 
providing independent oversight and investigations into two 
governmental agencies, both with very different missions, but 
equally consequential in today's financial system. In 2022, the 
Federal Reserve's Office of Inspector General conducted 13 
audits of the Reserve Banks, compared to just 5 of the CFPB, a 
less than 30-percent allocation. While I am aware that new 
programs created under the CARES Act have increased your 
workload, this begs the question, why did Congress fail to give 
the Bureau their own Inspector General? I was not here for the 
creation of the Dodd-Frank Act, but I came immediately 
afterwards, and I have been living with the echo effects of it.
    Mr. Delmar, like the Fed, the Treasury's IG office has been 
tasked with overseeing massive programs that had billions of 
dollars in Federal spending, whether they be programs that were 
a result of the pandemic or of the partisan American Rescue 
Plan. The Treasury Department will face challenges in holding 
participants of these programs accountable for proper use of 
those funds.
    Lastly, I want to spend some time focusing on the 
Securities and Exchange Commission. The SEC oversees $118 
trillion in annual trading volume, 29,000 registered entities, 
24 exchanges, 95 alternative trading systems, and, depending on 
the day of the week, digital assets. Last year, the SEC 
proposed an unprecedented 34 rules_34_with an additional 20 or 
so left on their most recent agenda.
    Ms. Sharek, the IG report your office released last fall 
was, frankly, jaw-dropping. While the SEC Chair continues to 
push a rushed rulemaking agenda in his effort to rewrite nearly 
every aspect of securities law, the Agency has failed to keep 
its own house in order.
    Furthermore, these efforts have been met with little 
question or inquiry from committee Democrats. Ranking Member 
Waters continues to defend Chair Gensler at every turn. What 
makes the above statement so alarming is the lack of stability 
at the SEC's Inspector General's Office. Since the last 
appointed IG retired in May of last year, 3 different 
individuals have assumed the acting Inspector General position 
over the last 10 months.
    Ms. Sharek, while I have no doubt you will be able to 
answer our Members' questions, it is worth noting that the 
current acting IG has only been on the job for roughly 90 days 
and will be need to replaced again in April, this April. Given 
the volume of rules currently before the SEC, one would hope 
that it is the Chair's preference to resolve this vacancy issue 
in a timely manner, but, then again, maybe not. Regardless, 
that is unacceptable in my mind.
    Without objection, I ask unanimous consent to enter into 
the record the letter we sent to Chair Gensler last week 
calling on him to appoint a permanent Inspector General at the 
SEC to allow for consistent and proper oversight of the Agency.
    Without objection, it is so ordered.
    I look forward to hearing from all of the witnesses, and I 
yield back the balance of my time.
    The Chair now recognizes the ranking member of the 
subcommittee, the gentleman from Texas, Mr. Green, for 4 
minutes for an opening statement.
    Mr. Green. Thank you, Mr. Chairman. Today, friends, the 
subcommittee will hold a hearing entitled, ``Holding the Biden 
Administration Accountable for Wasteful Spending and Regulatory 
Overreach.'' No mention of President Trump. Dear friends, we 
live in a world where it is not enough for things to be right, 
they must also look right, and much of today's hearing will 
emanate from what happened during the pandemic.
    You see, it doesn't look right when the world knows that 
the World Health Organization declared COVID-19 a pandemic on 
March 11, 2020, during the watch of a Republican President, 
Donald Trump, and today, this powerful committee will focus 
only on the watch of the Democratic President, Joe Biden. 
Sadly, this looks like a partisan witch hunt focused on a 
Democratic President, wherein the perfect will become the enemy 
of the good by overlooking the good that was done while 
ignoring the performance of his predecessor, Republican 
President Donald Trump.
    Therefore, a better title for this hearing, my friends, 
would be how Republicans are out to get a Democratic President 
by making the perfect the enemy of the good. The danger with 
making the perfect the enemy of the good is the adverse impact 
it is likely to have and produce during a future pandemic when 
millions of lives may be at risk and immediate action is 
necessary.
    Understanding this, I will focus on the good done by 
putting the American people above Republican politics during a 
pandemic. This was done by providing direct support to the 
American people with $814 billion to households and 
individuals; by supporting small businesses with $792.6 billion 
through the Paycheck Protection Program (PPP); by helping 
States keep schools, businesses, and emergency services open, 
with nearly $150 billion, which included dollars to almost 
90,000 local businesses; by fighting the pandemic with $47.8 
billion for COVID-19 testing, contact tracing, and mitigation, 
and with $16 billion to fund vaccine distribution as well as 
supply chains; by keeping people in homes with $29.6 billion in 
emergency rental assistance to 6.5 million households; and by 
keeping children out of poverty with $109 billion through the 
child tax credit.
    All of this was done because Democrats put the American 
people above Republican politics. Therefore, my refrain will be 
that while Republicans are making the perfect the enemy of the 
good, generally speaking, I will focus on the good accomplished 
when Democrats put the American people above Republican 
politics. I yield back, Mr. Chairman.
    Chairman Huizenga. The gentleman yields back.
    We will now turn to the testimony of our witnesses.
    First, Hon. Mark Bialek. Mr. Bialek is the Inspector 
General of the Office of the Inspector General for the Board of 
Governors of the Federal Reserve System and the Consumer 
Financial Protection Bureau. I will note that earlier today, 
seated right down there, was Fed Chair Powell, and I believe it 
was Mr. Rose who had asked about some of that interplay between 
the Fed and the Board of Governors and the CFPB. Mr. Bialek, 
for over 40 years, has been an Inspector General, in that 
community at least, and has experience. He previously served in 
numerous capacities at the U.S. Environmental Protection 
Agency, the Department of State, and the Department of 
Commerce, all in the Offices of Inspector General. As the 
Federal Reserve and CFPB Inspector General, he serves as a 
member of the Pandemic Response Accountability Committee.
    Second, Mr. Richard Delmar. Mr. Delmar is the acting 
Inspector General at the Department of the Treasury Office of 
Inspector General (OIG). He has served as Deputy Inspector 
General and Counsel, and as a Media and Legislative Liaison, 
and as a Whistleblower Program Coordinator at the Treasury OIG. 
Prior to the Treasury OIG, Mr. Delmar served on active duty in 
the Navy JAG Corps, and as a trial attorney in the Department 
of Justice Tax Division. Sir, we thank you for your service to 
our country.
    Mr. Delmar is also a member of the Pandemic Response 
Accountability Committee and chairs the Council of Inspectors 
General on Financial Oversight.
    And third, Ms. Rebecca Sharek. Ms. Sharek has served as the 
Deputy Inspector General for Audits, Evaluations, and Special 
Projects at the SEC since January of 2014. Last year, she 
served as the acting Inspector General following Mr. Carl 
Hoecker's retirement. Ms. Sharek is active in the Federal 
oversight community, and has chaired the Enterprise Risk 
Management Working Group of the Council of Inspectors General 
on Integrity and Efficiency.
    We thank each one of you for taking time to be here today. 
Each of you will be recognized for 5 minutes to give an oral 
presentation of your testimony, and without objection, each of 
your written statements will be made a part of our permanent 
record.
    Mr. Bialek, you are now recognized for 5 minutes for your 
oral remarks.

  STATEMENT OF THE HONORABLE MARK BIALEK, INSPECTOR GENERAL, 
 OFFICE OF INSPECTOR GENERAL FOR THE BOARD OF GOVERNORS OF THE 
    FEDERAL RESERVE SYSTEM (FED) AND THE CONSUMER FINANCIAL 
                    PROTECTION BUREAU (CFPB)

    Mr. Bialek. Thank you, and good afternoon, Chairman 
Huizenga, Ranking Member Green, and members of the 
subcommittee. I am Mark Bialek, the Inspector General of the 
Federal Reserve Board and the Consumer Financial Protection 
Bureau. I very much appreciate the opportunity to discuss our 
oversight of the Board and the CFPB.
    Independent, objective oversight is critical for ensuring 
government agencies work efficiently and effectively, and that 
they abide by the laws, the regulations, and the rules and 
practices that govern them. Such oversight work is, of course, 
also vital for maintaining public trust and confidence in 
government institutions. Toward that end, over the last 5 
years, we have issued 108 audit and evaluation reports: 61 of 
those reports focused on the Board and included 175 
recommendations for improvement; and 47 of those reports 
focused on the CFPB and included 122 recommendations.
    To provide the most-effective oversight, we consider a 
number of factors when we plan our discretionary work. We look 
at levels of risk within a program or operation and areas that 
we see as major management challenges. As risk areas shift over 
time, we appropriately adapt our work to address those changing 
conditions. The result is that the balance between our Board 
and CFPB workload will fluctuate from time to time.
    Our Board and CFPB audits and evaluations cover a broad 
area. In 2021, we identified several major management 
challenges facing the Board, including pandemic response, 
emergency lending facilities design and implementation, 
organizational governance and enterprise risk management, and 
information security and cybersecurity oversight at supervised 
financial institutions. We also identified major management 
challenges facing the CFPB, including information security, 
supervision and enforcement strategy, and managing consumer 
complaints. We are currently updating our management challenges 
for 2023.
    In addition, we have other ongoing work covering the 
Board's and Reserve Banks' ethics programs pertaining to 
personal investment and trading activities, the CFPB's process 
for conducting enforcement investigations, and the CFPB's 
effectiveness and timeliness in responding to consumer 
complaints. The details on these projects are contained in our 
publicly-available work plan, which we update quarterly.
    We also conduct investigations into possible violations of 
law, regulation, or policy. The matters that we often 
investigate include bank fraud, employee misconduct, ethics 
violations or conflicts of interest by agency officials, leaks 
of protected information, and waste or mismanagement of funds 
or government resources. Since the start of the pandemic, we 
have dedicated significant resources to investigating potential 
fraud related to the Board's emergency lending facilities. Over 
the last 5 years, we have closed 170 investigations, leading to 
116 convictions and $4.4 billion in financial actions. We 
opened a total of 141 pandemic response-related cases, 37 of 
which are now closed, resulting in 62 convictions.
    In conclusion, I am so very proud of the breadth of our 
oversight work, especially given the challenges posed by the 
pandemic. Congress is a key stakeholder for us, so we, of 
course, always welcome your feedback on risk areas that you see 
facing the Board and the CFPB. This concludes my statement and 
I would be pleased to respond to your questions.
    [The prepared statement of Inspector General Bialek can be 
found on page 30 of the appendix.]
    Chairman Huizenga. Thank you, Mr. Bialek. We appreciate 
that.
    Mr. Delmar, you are now recognized for 5 minutes for your 
oral remarks.

   STATEMENT OF RICHARD K. DELMAR, ACTING INSPECTOR GENERAL, 
  OFFICE OF INSPECTOR GENERAL, U.S. DEPARTMENT OF THE TREASURY

    Mr. Delmar. Thank you, Mr. Chairman, Ranking Member Green, 
and members of the subcommittee. I am Rich Delmar, the acting 
IG for the Department of the Treasury, and I appreciate the 
opportunity to talk about the oversight work that we have done 
on the many programs for which Treasury is responsible. I will 
also discuss at the end, if I have time_I understand the 
committee has an interest in some of the work we are doing with 
respect to the Financial Crimes Enforcement Network (FinCEN).
    Treasury has responsibilities under all three of the major 
pandemic statutes that have passed since 2020, and its 
responsibilities have expanded. Because of that, they have been 
responsible for dispersing over $650 billion to a large 
universe of recipients, governmental organizations, businesses, 
and many others. We have oversight responsibility for 12 of 
those programs, and I am going to talk about 4 of them today 
where we have found concerns about improper payments, instances 
of fraud, and costs and internal control concerns. The programs 
are the Air Carrier Payroll Support Programs, the original 
Coronavirus Relief Fund, the Emergency Rental Assistance 
Programs, and the State and Local Fiscal Recovery Funds. To put 
all of these in context, I want to mention a couple of concepts 
that are key to the work we do, and that is the whole concept 
of improper payments and fraud, the concept of questioned 
costs, and the role of a Treasury bureau, the Bureau of the 
Fiscal Service (BFS), and its Do Not Pay Program.
    Improper payments are, as it suggests, payments that are 
not authorized. They were incorrectly done. It is not the same 
thing as fraud. Any incidence of fraud will be, by definition, 
an improper payment, but not every improper payment will 
constitute fraud. It could be something that happened by 
mistake, by accident, by misinterpretation of eligibility, but 
in those cases, money that should have gone to authorized 
recipients doesn't get there or it goes to unauthorized 
recipients. And to the extent that happens, the effectiveness 
of the program and the execution of Congress' intent in 
creating that program is not met, so that is a key concern.
    We have done audit work on Treasury's Improper Payment 
Program, and we have determined that at least with respect to 
the bureaus other than the IRS, the Department is in compliance 
with those rules. BFS' Do Not Pay Program reduces the amount of 
improper payments because it is a forum by which people can 
find out if a recipient is entitled. It can be made more 
effective if it has greater access to all of the relevant 
information. We have done some work on that. One of the big 
concerns is the access it has to the Social Security 
Administration's Master Death File, and there have been some 
efforts to improve that. There was actually legislation that 
will go into effect later this year which will increase the 
availability of that Social Security information to the Do Not 
Pay Program.
    Moving on to the specific programs for which we have 
oversight, the Air Carrier Payroll Support Program_there are 
actually three of them, one under each of the statutes_gives 
payments to air carriers, passenger and cargo, and affiliated 
businesses that were impacted by the decline in air traffic. We 
have a mandatory audit requirement for a subset of those 
eligible carriers and contractors. Generally, it is the smaller 
ones. What we found was that there was a systemic problem in 
the amounts that they were paid because of misinterpretation of 
the rules, and have addressed those concerns. One of the big 
problems is self-certification versus actually going out and 
checking.
    Under the Coronavirus Relief Program, and the work we did, 
we set up a portal by which all the recipients could report 
what they had done with the money. And I see I am running out 
of time, so let me skip the Emergency Rental Assistance 
Program. There are actually a couple of those. We are getting a 
lot of complaints about how that works, and we have set up a 
specialized team to process those complaints, and get caught up 
with the problems that are being reported to us about that. And 
we will look at those as appropriate.
    Lastly, I just wanted to mention the FinCEN work that we 
are doing. We have a series of related audits dealing with how 
FinCEN manages its bulk data provision program, and we see 
issues with the memorandums of understanding (MOUs). We see 
issues with the controls on how that information is used, and 
we have a series of reports that are going to be coming out 
starting in the spring and throughout the year.
    [The prepared statement of Acting Inspector General Delmar 
can be found on page 44 of the appendix.]
    Chairman Huizenga. I will look forward to that. The 
gentleman's time has expired. Ms. Sharek, you are recognized 
for 5 minutes for your oral testimony.

 STATEMENT OF REBECCA L. SHAREK, DEPUTY INSPECTOR GENERAL FOR 
AUDITS, EVALUATIONS, AND SPECIAL PROJECTS, OFFICE OF INSPECTOR 
     GENERAL, U.S. SECURITIES AND EXCHANGE COMMISSION (SEC)

    Ms. Sharek. Chairman Huizenga, Ranking Member Waters, 
Ranking Member Green, and members of the subcommittee, thank 
you for inviting me to testify about the efforts of the U.S. 
Securities and Exchange Commission Office's of Inspector 
General (OIG) to report on the management and performance 
challenges at the SEC and some of the OIG's recently completed 
audits and evaluations. In my testimony, I am representing the 
OIG, and the views I express are those of my office and myself, 
and do not necessarily reflect the views of the Commission or 
any Commissioners.
    The core mission of the SEC is to protect investors, 
maintain fair, orderly, and efficient markets, and facilitate 
capital formation. The OIG is an independent office within the 
SEC that conducts audits, evaluations, and investigations of 
the SEC's programs and operations to detect and deter fraud, 
waste, and abuse, and to promote integrity, efficiency, and 
effectiveness. In doing so, the OIG plays a critical role in 
helping the SEC achieve its mission.
    The OIG Office of Audits, which I manage, provides 
essential accountability and transparency, and, where 
appropriate, makes recommendations for corrective action. Since 
January 2021, the Office of Audits has issued 13 audit and 
evaluation reports that made 83 recommendations to SEC 
management, all of which were agreed to by management, and more 
than half of which are closed as of this date.
    Among other things, our recommendations have sought to aid 
the Division of Enforcement in improving communication of its 
capabilities and resources that may expedite investigations, 
help further increase efficiencies in the SEC's Whistleblower 
Program, improve strategic planning and performance management 
related to the SEC's investor education and outreach, and 
further strengthen the SEC's contract management, information 
security, Investment Advisor/Investment Company Examination 
Program, and the Tips, Complaints, and Referrals Program, and 
controls over hiring actions.
    The Reports Consolidation Act of 2000 requires OIGs to 
identify and report annually on the most-serious management and 
performance challenges facing agencies. In deciding whether to 
identify an area as a challenge, the SEC OIG considers its 
significance in relation to the SEC's mission, its 
susceptibility to fraud, waste, and abuse, and the SEC's 
progress in addressing the challenge. We provide a draft of 
each year's report to SEC officials, and we consider all 
comments received when finalizing the report.
    Last October, we issued our latest report on management 
performance challenges, and we identified four broad areas 
where the SEC faces challenges. The first area is meeting 
regulatory oversight responsibilities. In this section, our 
report described the challenges of managing resources while 
meeting the SEC's regulatory agenda, keeping pace with changing 
markets and innovations, and leveraging technology and 
analytics to meet mission requirements and respond to 
significant developments and trends. In part, we discussed 
opportunities to further strengthen cross-functional 
collaboration and communication during a period of increased 
rulemaking activities, and in light of changes in the 
workforce, including due to attrition.
    The second area, protecting SEC systems and data, noted 
opportunities to evaluate and address the underlying causes and 
impact of a material weakness related to insufficient user 
controls, strengthening the Agency's cybersecurity posture, and 
continuing to mature its information security program.
    Third, improving contract management is the next challenge 
noted in our report. As we described, a growing majority of the 
SEC's contract support by dollars obligated is concentrated in 
information technology services, and management of information 
technology, acquisitions, and operations is recognized as a 
high-risk area across the Executive Branch. Additionally, as in 
prior years, we reported on the SEC's use of time and material 
contracts, noting that such contracts are considered riskier 
than fixed-price contracts because contractors bill the 
government by the hour and, therefore, may lack incentives for 
cost control.
    The fourth, and final, challenge discussed in our report is 
ensuring human capital management. In this section, we provide 
data that demonstrates recent increases in attrition. We also 
discussed uncertainties that exist surrounding the plans for 
return to office and the potential for expanded telework, as 
well as an audit we completed that identified opportunities to 
further strengthen controls over the SEC's hiring actions.
    In conclusion, the SEC OIG remains committed to examining 
important aspects of the SEC's programs and operations. For 
example, we are currently assessing controls over public 
comments submitted online, and Agency actions taken in response 
to a technological error in the public comment process that was 
disclosed last year. We look forward to continuing our 
cooperative working relationship with SEC management and the 
subcommittee. Thank you for the subcommittee's support for our 
mission, and for the opportunity to testify. I will be pleased 
to answer any questions you have.
    [The prepared statement of Deputy Inspector General Sharek 
can be found on page 57 of the appendix.]
    Chairman Huizenga. Thank you.
    We are going to now turn to Member questions, and the Chair 
will recognize himself for 5 minutes.
    I will note my colleague was going on in his comments about 
this focusing only on the Biden Administration. Well, we are 2 
years in, halfway through the Biden Administration, so yes, I 
will note that Jay Clayton, as head of the SEC, had an active 
schedule in front of this committee, under both Republicans and 
Democrats as well, while he served until 2020. So I want to 
thank our witnesses again, and I am going to jump right into my 
questions.
    Ms. Sharek, my first question is for you. I am concerned 
about transparency at the SEC. The SEC is one of the wealthiest 
independent agencies in our Federal Government, based on how it 
collects the fines and uses that to fund itself. The Agency has 
many employees and resources, yet it appears not to allocate 
them to respond to congressional inquiries or requests, or 
requests made under the Freedom of Information Act (FOIA), to 
ensure that citizens, and the media, and others can provide a 
check on the government and hold the Federal Government 
accountable to its statutory duties.
    I understand that you worked on the top management 
challenges report of 2022. Considering the major workforce 
challenges that were highlighted in that report, attrition and 
some other things, do you plan to evaluate resource allocation 
with respect to the different offices at the Agency, 
specifically the General Counsel's Office, who responds to 
Congress, and the Office of FOIA services?
    Ms. Sharek. Yes, I did work on the Management and 
Performance Challenge Report in question. We are beginning the 
work to produce this year's report, and we will certainly be 
following up on some of the workforce challenges that we 
identified. We have not planned an audit specifically of the 
allocations of the different offices and divisions, but as we 
develop our Fiscal Year 2024 plan, we are certainly interested 
in continuing to discuss with you your concerns.
    Chairman Huizenga. Consider this a suggestion.
    Ms. Sharek. Yes.
    Chairman Huizenga. Yes. I think we have seen a tremendous 
delay in responses to, frankly, Members on both sides of the 
aisle as well as the media and others when it comes to FOIA. As 
you know, the committee initiated an investigation into FTX 
under the leadership of, at the time, Chair Waters, that has 
been continued with Chair McHenry. We also formally requested 
an investigation from your office. Will your office commit to 
investigating the SEC's role and involvement with FTX?
    Ms. Sharek. I am aware of the letter in question and have 
participated in some preliminary conversations amongst our 
leadership team. I have not been involved in all of those 
discussions. In my role of as the head of the Office of Audit, 
I think any questions about what our office may or may not do 
would probably be best addressed to our acting Inspector 
General.
    Chairman Huizenga. At a different time?
    Ms. Sharek. I am sure our office can reach out to you and 
your staff. I am not prepared, in my role as the head of the 
Office of Audit, to speak for our acting Inspector General.
    Chairman Huizenga. Okay. My next question is for you, Mr. 
Delmar. Standing up the Emergency Rental Assistance (ERA) 
Program was particularly challenging, no doubt. Complaints 
about those programs are not new and continue to come through 
as ERA2 funds continue through 2027. Mr. Delmar, is it true 
that your office has received thousands of pandemic-related 
complaints through your hotline, with most of them related to 
the ERA?
    Mr. Delmar. Yes, sir. We have on the order of over 2,000 at 
this point. It grows by the day, and that is why we have set up 
the cross-functional team to specifically work on processing 
those.
    Chairman Huizenga. Why is that? Why do you speculate? What 
are you hearing from the folks who are registering these 
complaints?
    Mr. Delmar. I think it is probably fair to say that it is 
more of a retail distribution operation, just more 
opportunities for people to see either real or perceived 
inequities, or people getting the funds that, for whatever 
reason, should not. And what we have to do is isolate those 
things, and if that is something that we can look at, we will. 
If it is something that somebody else ought to be looking at, 
we will do our best to refer it to where it should go.
    Chairman Huizenga. Mr. Bialek, I have just a few minutes 
left. You oversee a very busy CFPB. In the Board's OIG work 
plan, there is a plan to, ``review the Board's approach to 
climate risk supervision at financial institutions within the 
first quarter of 2023.'' My concern is that the Fed may be 
acting outside of the supervisory role when it comes to climate 
policies. Can you tell me more about the goal of this review, 
as well as the status of the review, and what Board activity 
has encouraged your office to add this to your work plan? I am 
going to let you answer very quickly, and then I am going to 
submit a couple of other questions to you in writing.
    Mr. Bialek. Certainly. We do have a team looking at climate 
risk issues in the supervision arena. They are going to be 
drafting a White Paper that will be setting forth the 
activities of the Board as it looks at establishing and 
implementing a climate risk activity and initiative. We are 
going to compare that to other agencies, and departments, and 
central banks to see and check their missions and their 
authorities to see how that compares to the Board's efforts, 
and maybe have some best practices laid out so we can put the 
pieces of the puzzle together as the Board continues to pursue 
this matter.
    Chairman Huizenga. My time has expired, so we are going to 
have to continue this later, and maybe one of my colleagues can 
pick that up.
    Mr. Bialek. Okay.
    Chairman Huizenga. I appreciate it. At the request of the 
ranking member, we are going to go to the gentleman from 
Nevada, Mr. Horsford, next.
    Mr. Horsford. Thank you very much, Mr. Chairman, and to the 
ranking member for holding this necessary hearing. And thank 
you to our Inspectors General for appearing before the 
subcommittee today. There can be no doubt that it is necessary 
at times to take a step back and retrospectively analyze the 
efficacy of our work, both here in Congress as well as the 
Administration's implementation of the laws that we passed. I 
want to say that I am proud of the votes that I took to deliver 
for the American people during the hardest days of the 
pandemic, and I don't need to remind my colleagues of the depth 
of the pain that all of our constituents felt at times.
    However, despite the challenging circumstances we found 
ourselves in, we were able to deliver relief to families and 
the small businesses who are struggling to simply keep their 
heads above water. We were able to ensure 6.5 million working 
families could keep a roof over their heads with the emergency 
rental assistance that we provided. We were able to protect the 
payrolls of small businesses across the country with the 
Paycheck Protection Program (PPP) so that they could keep their 
doors open and keep approximately 90 million people on the 
payroll. When State and local governments faced historic 
shortfalls, we were able to make them whole and to preserve the 
services that our constituents rely on every day. That includes 
public safety, healthcare workers, first responders, police, 
and fire, all that are essential to our quality of life.
    So, I am happy to take a look back at the challenges that 
we faced as long as we, as you said, Mr. Chairman, keep in mind 
that there were successes, and I hope that we don't forget 
that. These programs were vital lifelines to Americans at a 
time when uncertainty and fear dominated their lives. And I 
want to commend my colleagues for following up on our efforts 
from the last Congress and taking time today to ensure that 
these programs are working as Congress intended. Of course, 
there are lessons to be learned, and I am eager to be educated 
on how we can better prepare for whatever may come next.
    Now, I have been sounding the alarm for years on the 
fraudsters and the thieves who have been ripping off American 
taxpayers and blocking honest applicants from accessing the 
support they need. When we saw issues with the unemployment 
insurance system, I introduced the Guaranteeing Unemployment 
Assistance and Reducing Deception (GUARD) Act to guarantee our 
State unemployment insurance programs can fight back against 
these literal criminal cartels, most of whom are foreign. No 
individual should be allowed to take advantage of individuals 
desperately in need of these emergency benefits. It should be 
no different in the programs overseen by our witnesses today. 
These criminals should and will be held accountable, but in 
order to do so, we must have accurate data on the funds that 
were dispersed.
    Mr. Delmar, I understand that multiple programs under 
Treasury's jurisdiction, including the Emergency Rental 
Assistance Program, have had various reporting and compliance 
delays that have impeded monitoring and audit activities. Would 
you please speak to how these delays may inhibit the 
Department's ability to identify and eliminate fraud?
    Mr. Delmar. Generally speaking, Congressman, a lot of the 
problem was delays by the Department in setting up how the 
programs were actually going to be operated, and putting 
together the guidance so that people who were applying had a 
clearer idea of what was eligible and what was not. The 
combination of delays in standing up the program, having the 
guidance, and being able to get the reports input, just means 
that you have less of a thorough view of what is going on. And 
anytime there is a lack of guidance, the opportunities for 
ineligibles to get benefited increases.
    Mr. Horsford. Okay. I am going to follow up with this last 
question. I would like to ask you to respond in writing. I am 
concerned about the implementation of the community development 
financial institutions (CDFIs) and the minority depository 
institutions (MDIs), and the funds that we need to ensure are 
getting to the marginalized and underserved communities. Could 
you please respond in writing to the question that I will 
submit for the record? And with that, I yield back.
    Chairman Huizenga. The gentleman yields back. With that, we 
are going to the gentlewoman from Missouri, the former Chair of 
this subcommittee and former ranking member, as well, Mrs. 
Wagner, who is also the Chair of our Subcommittee on Capital 
Markets. She is now recognized for 5 minutes.
    Mrs. Wagner. Thank you, Chairman Huizenga. Ms. Sharek, the 
SEC Inspector General's report on the SEC's management and 
performance challenges from last October_I know you were the 
first IG and you worked on this particular report. I think it 
was released under a second IG, but I know that you were 
working on it as you were the first one appointed as acting. 
And it highlights the concerns of many managers across the SEC 
about increased risks, specifically, and difficulties managing 
mission-related work. The report is very clear that these 
concerns are driven by the, ``increase in the SEC's rulemaking 
activities that are being rushed with shortened timelines 
during the drafting process.'' That is taken directly from the 
report.
    The Inspector General is not only the only one urging the 
SEC to slow down. Last April, several members of this 
subcommittee joined a group of 47 bipartisan Members in a 
letter to Chair Gensler asking for longer comment periods, 
particularly for significant rulemakings, and on September 
12th, Democratic Senators sent a similar letter. Yet, since the 
IG report was released, the SEC has not_underscore, ``not''_
reduced its quantity or slowed down its speed of rulemaking. By 
the end of 2022, the SEC had introduced 34 new rule proposals, 
an increase of 143 percent compared to the annual average over 
the preceding 5 years of 14 proposals. The October report made 
it clear that the volume and pace of rulemaking under Chair 
Gensler are threatening what the Inspector General exists to 
promote, and this is what you worked on and helped draft, ``the 
integrity, efficiency, and effectiveness of the critical 
programs and operations of the SEC.''
    Ms. Sharek, with such short comment periods, are managers 
concerned that the Commission is not getting the data they need 
from all stakeholders?
    Ms. Sharek. Some of the folks that we met with and some of 
the rulemaking divisions did express that there may be some 
increased risk there. And we felt, given the role of the 
individuals that we met with and their experience, that it 
warranted inclusion in the major management performance 
challenges.
    Mrs. Wagner. Increased risk? I agree. What other tools does 
the Inspector General have to address the management problems 
stemming from the SEC's regulatory agenda?
    Ms. Sharek. Certainly, we will revisit these issues, and we 
are starting to work on and gather our staff together. This 
month was typically when we will begin efforts to draft this 
year's report, so we will be following up on each of the issues 
that we addressed. And certainly, we have audits and 
evaluations that my office performs, and investigations from 
the Office of Investigations as well.
    Mrs. Wagner. Can you please provide additional details on 
these risks that are being created by the mission-related work 
that is being neglected because of the increase in rulemaking 
activities, as well as the causes and impacts of the, 
``coordination and communication challenges in the rulemaking 
process,'' particularly given potential overlaps in 
jurisdiction and differences in opinions?
    Ms. Sharek. I don't have any specific risks to any specific 
activity that I can offer to you. The conversations that we had 
with knowledgeable individuals were broad. They broadly 
described, as you mentioned, the volume and the urgency, so I 
don't have anything more specific.
    Mrs. Wagner. It did say, though, that mission-related work 
was being neglected. Is that correct?
    Ms. Sharek. I don't know that we used the word, 
``neglect.''
    Mrs. Wagner. Yes, you said mission-related work that was 
causing risks.
    Ms. Sharek. Generally, as I said, we did not have any 
specific details that were provided to us.
    Mrs. Wagner. Do you anticipate that the IG will be 
following up on these issues, given that they impact the 
Commission's ability to meet its mission, including protecting 
investors?
    Ms. Sharek. That the IGs office will follow up? Yes, 
absolutely.
    Mrs. Wagner. Great. Thank you. And, Mr. Chairman, before I 
yield back, I would submit to the record the fact that 
Secretary Gensler has not appointed a permanent IG after over 2 
years in the job. I would like it entered in the record that 
what he is doing is putting in a new acting IG every 180 days. 
I think this is a way to thwart Congress and our oversight, so 
that we can't actually talk to an IG who is permanent.
    Chairman Huizenga. Yes.
    Mrs. Wagner. I would like that to be placed in the record. 
Thank you.
    Chairman Huizenga. The gentlelady's time has expired. That 
has been noted, and the letter requesting that Chair Gensler 
appoint a permanent IG has been sent as well.
    With that, the Chair now recognizes the ranking member of 
the Full Committee, the gentlewoman from California, Ms. 
Waters, for 5 minutes.
    Ms. Waters. Thank you very much. I have been trying to 
quickly understand the role and responsibility of all of the 
Inspectors General related to the CARES Act and the American 
Rescue Plan. I want to know if you were involved at all with 
the Defense Production Act, any of you, in planning or in 
management concerns, anything about the Defense Production Act, 
please. Each of you, please, yes or no?
    Ms. Sharek. No, ma'am.
    Ms. Waters. No?
    Ms. Sharek. No.
    Ms. Waters. No?
    Mr. Delmar. No, ma'am.
    Ms. Waters. No?
    Mr. Bialek. No.
    Ms. Waters. How were you involved with the PPP program? Do 
any of you know anything about the PPP program?
    Mr. Bialek. It is not within Treasury OIG's oversight 
jurisdiction.
    Ms. Waters. But you had the responsibility for basically 
planning, as I understand, what were you planning. I am reading 
your description of what you had the responsibility for.
    Mr. Delmar. Our oversight responsibilities are for the 
original Coronavirus Relief Fund, the Emergency Rental 
Assistance Programs, the Air Carrier Programs, the State and 
Local Fiscal Recovery Funds, the CDFI Rapid Response Program, 
the Emergency Capital Improvement Program, the Community 
Emergency Response Team (CERT) Program, which deals with other 
transportation entities, and an extension of the old State 
Small Business Credit Initiative (SSBCI) Program.
    Ms. Waters. So, you are not familiar with PPP and all of 
what happened in the first year of the PPP program under Trump, 
when the big companies and corporations were in the panels 
created by the banks as their concierge clients? They got 
funded, and some of them even felt guilty and gave the money 
back. Are you familiar with that?
    Mr. Delmar. I would like to add to what I said previously. 
Through our involvement in the PPP program, we have helped, 
along with many other IGs, including the the Small Business 
Administration (SBA) OIG, and the Pandemic Response 
Accountability Committee (PRAC), in conducting investigations 
into abuses in the PPP program.
    Ms. Waters. Okay. Was this during the first year of the PPP 
program?
    Mr. Delmar. That we got involved?
    Ms. Waters. That you got involved, that you were involved 
in helping the SBA.
    Mr. Delmar. I don't recall exactly when we and other IGs 
were recruited to help the SBA OIG, but pretty early on, yes, 
ma'am.
    Ms. Waters. Okay. Were you responsible for helping to 
identify these major corporations who got PPP money that the 
PPP program was not intended to give money to? Are you familiar 
with that?
    Mr. Delmar. I am certainly familiar with it, but we don't 
have primary responsibility for that. We have been, as I said, 
with other IGs, helping the SBA OIG, which has a tremendous_
    Ms. Waters. Do you know who was responsible? Who is 
responsible for looking at fraud, waste, and abuse in PPP?
    Mr. Delmar. The SBA OIG and the PRAC are involved in that 
as well.
    Ms. Waters. So, you worked with the SBA OIG, but had 
nothing to do with PPP?
    Mr. Delmar. Each IG is independent, ma'am, and we help each 
other, as I said.
    Ms. Waters. Well, when you help each other, do you talk to 
each other?
    Mr. Delmar. Yes, we do.
    Ms. Waters. So, did you all talk about PPP and what was 
going on?
    Mr. Delmar. Sure. In the PRAC, and in the Council of 
Inspectors General on Integrity and Efficiency, it is a big 
issue, and it was one of the ones that was so big that more 
than just Inspector General Ware's shop at SBA OIG got involved 
in it. It was to help him carry out his responsibilities as the 
person responsible for oversight of the SBA.
    Ms. Waters. So, while we are looking at fraud, waste, and 
abuse, and the way that you have described what your 
responsibility was, can you say that in an investigation, part 
of your responsibility was to discover or find or investigate 
fraud, waste, and abuse in anything that you were doing?
    Mr. Delmar. I'm sorry, ma'am, I didn't hear the end of 
that. Could you repeat it?
    Ms. Waters. Did you have the responsibility for 
investigating fraud, waste, and abuse in any of your 
responsibilities?
    Mr. Delmar. Yes. Under the IG Act, each IG is responsible 
for looking at fraud and waste in the programs and operations 
of that department, which, in the case of my office, would be 
Treasury programs, except not the IRS, and not the Troubled 
Assets Relief Program (TARP).
    Ms. Waters. Did you find_
    Chairman Huizenga. The gentlelady's time has expired.
    Ms. Waters. Thank you very much. I yield back.
    Chairman Huizenga. The gentlelady yields back. With that, 
the Chair recognizes the gentleman from Tennessee, Mr. Rose, 
for 5 minutes.
    Mr. Rose. Thank you, Chairman Huizenga and Ranking Member 
Green, for holding this hearing, and thanks to our witnesses 
for taking the time to be here today and for your insights.
    I want to start with Deputy IG Sharek. Your report shows 
that Chair Gensler's aggressive rulemaking agenda has been 
limiting the time available for staff research and analysis, 
which could potentially make cost-benefit analysis 
exponentially more difficult and less accurate. Almost every 
one of his 60-plus rulemakings, including on private funds, 
dealer definitions, Form PF, equity, market structure, climate 
disclosures, and now the custody proposal, has significant 
consequences for the numerous industries targeted by these 
rules.
    So, Deputy IG Sharek, is it true that the report found that 
each of the major rulemaking divisions at the Commission has 
stated that they do not have enough time to properly write all 
of these rules?
    Ms. Sharek. No, I cannot support that statement. We 
certainly collected information that there is a challenge, an 
ongoing challenge, again, related to the folks that we met with 
who shared that in certain cases, the volume and the urgency of 
the rulemaking activity is presenting a challenge. We didn't 
speak to them about specific rules or the substance of specific 
rules. It was more geared towards the workload and the 
challenge that it was presenting to the managers with whom we 
met.
    Mr. Rose. Is it true that they had to pull one rule back 
and reopen the comment period because there was a failure to 
properly catalogue all of the comments that had been submitted?
    Ms. Sharek. I am not sure which rule you are referring to; 
they reopened the comment period for a number of rules that 
related to a technological error that was publicly disclosed, 
so I am aware of that. I am not sure if that is the rule to 
which you are referring.
    Mr. Rose. Would you surmise that that technological error, 
the failure to observe that might have been a result of the 
rushed or frantic pace of rulemaking?
    Ms. Sharek. My office is looking into the technological 
error, and we plan to hopefully be able to provide a public 
report on that by the end of this month. So, I don't want to 
get out ahead of the work that is still ongoing, but I think we 
will have an answer to that question as soon as our work 
concludes.
    Mr. Rose. We look forward to hearing that answer. Secondly, 
Deputy IG Sharek, is it true that the Division of Economic and 
Risk Analysis has warned that they do not have enough time to 
conduct proper cost-benefit analysis for all of these rules?
    Ms. Sharek. I am not aware of that specific warning.
    Mr. Rose. Has the Agency shown any attempt or awareness 
with regard to perhaps slowing down or reassessing the process 
based on the IGs recommendations? In other words, do they seem 
to be listening to the report that you have put forward?
    Ms. Sharek. As has already been stated in this hearing, the 
numbers continued to increase throughout the remainder of last 
year. We will certainly continue engaging with the Agency to 
determine what they may have done with respect to our 
management performance challenge, unlike an audit report where 
we have an actionable recommendation that we ask them to 
respond to, and then we assess their performance. This report 
was informational to them to take further action deemed 
necessary, so, again, we will be continuing to follow up to see 
exactly what they may have done.
    Mr. Rose. Sounds sort of like a, ``damn the torpedoes, full 
speed ahead,'' policy there.
    IG Bialek, earlier this morning, I asked Chair Powell about 
the Fed's oversight of the CFPB budget request, and he told me 
that you would have the answer, so I hope that you have the 
answer, or I guess I will have to go back to him. The question 
is, does the Federal Reserve Board perform any due diligence of 
the CFPB's claims about its budget or any verification of the 
budget requests and whether they comply with the statute?
    Mr. Bialek. Congressman, we conducted a review actually 
based on a request from Congressman Barr back in 2019, I 
believe it was. We issued a report in 2019 where we looked at 
exactly what the legal responsibilities were of the Board and 
the Bureau when it comes to processing requests from the 
Bureau, the CFPB, for their quarterly budget. We looked at both 
the CFPB's responsibilities to provide information to the 
Board, and we looked at the Board's responsibilities under the 
law for what it is they were required to do in processing those 
requests. We determined that they both abided by those 
statutory requirements that were in the Dodd-Frank Act for that 
purpose. We did find there was some failure to report to 
Congress some information about those budget requests, I think, 
for 2 or 3 years. They fixed that and started reporting them as 
they were required to do, but other than that, they both were 
upholding their legal responsibilities on the statute.
    Mr. Rose. Thank you. I yield back.
    Chairman Huizenga. The gentleman's time has expired. The 
Chair now recognizes the gentlewoman from Texas, Ms. Garcia, 
for 5 minutes.
    Ms. Garcia. Thank you, Mr. Chairman, and thank you to all 
of the witnesses who are joining us today.
    Before I get to my questions, I would like to just point 
out as a point of personal privilege that this title is just 
really a misnomer and a misrepresentation of the insensible 
pandemic and economic relief dollars that the Biden 
Administration has provided to the American public: ``wasteful 
spending.'' It really was about saving lives, and that is what 
we should really be looking at. In Texas alone, $3.3 billion 
helped nearly 736,000 households pay their rent, and PPP 
funding helped over 209,000 businesses in Houston alone while a 
deadly pandemic ravaged our nation.
    With that context, I also want to remind everyone that all 
of these programs were passed and signed somewhere between 
April and May of 2020, and our President was not inaugurated 
until January 20, 2021. So, in fact, most of these programs 
were signed into law by the former twice-impeached President, 
and, more importantly, they were implemented by him. I remember 
more than one occasion when we had Treasury Secretary Mnuchin 
talking about the PPP program. We had HUD Secretary Carson 
talking about the housing assistance. So, this whole misnomer, 
misinformation that it is all President Biden and all his 
fault, frankly, is just what we would call in Texas, well, I 
bet I shouldn't say that word; I will just say, ``bunk.'' It is 
just bunk.
    Mr. Delmar, I am going to start with you. I am just trying, 
frankly, to get my head around, what is it you really do? You 
first said in response to one of my colleague's questions that 
you really didn't have any authority or do anything with the 
PPP program, but then, when the ranking member of our committee 
asked you a question, you said, well, yes, we do because we 
went in there and helped. So, did you or did you not work on 
anything having to do with the PPP program, and do you agree 
with me that when you say that there was a problem with setting 
it up, it wasn't President Biden who set it up. That was set up 
back when it first got passed in the year before.
    Mr. Delmar. Let me clarify, Congresswoman.
    Ms. Garcia. Please do.
    Mr. Delmar. Okay. We do not have primary oversight.
    Ms. Garcia. Oh, I understand the word, ``primary,'' sir, 
but you later said that you did, because you went in there to 
help the SBA OIG.
    Mr. Delmar. We, along with_
    Ms. Garcia. Did you or did you not review or audit any PPP 
loans?
    Mr. Delmar. No, we were assisting more on the investigative 
side of individual cases involving instances of PPP fraud.
    Ms. Garcia. So, you did look at cases involving PPP fraud. 
Do you recall if those cases were before or after January 2021?
    Mr. Delmar. I don't recall when our assistance started.
    Ms. Garcia. No, I mean when the cases were involving loans 
between January 2021, before or after.
    Mr. Delmar. I can get you an answer for that, ma'am. I 
don't want to give you incomplete or erroneous information now, 
so I will have to check our records.
    Ms. Garcia. Okay. So, you are not familiar with any fraud 
or abuse of any of the PPP loans at all?
    Mr. Delmar. Not in specific detail of specific cases. I can 
tell you generally.
    Ms. Garcia. I don't want specifics. I just want to know 
whether you did or you didn't do any of it, because you are 
here testifying, and I am trying to figure out who is supposed 
to talk about these things.
    Mr. Delmar. Okay.
    Ms. Garcia. But that is okay, sir.
    I will move on to Ms. Sharek. Ms. Sharek, two management 
challenges identified in the SEC OIG October 22nd memo are 
mentioned as being managing resources while meeting the 
regulatory agenda, and implementing a program to effectively 
retain and recruit qualified staff to replace personnel loss 
due to attrition. Is it the case that the SEC OIG reviews and 
audits have established that there is a causal relationship 
between these two?
    Ms. Sharek. No.
    Ms. Garcia. There is not, or does this report state that 
the SEC faces two separate problems_an increased regulatory 
workload, and an increase in loss of personnel_that combined, 
increase the management and performance challenges confronting 
the SEC?
    Ms. Sharek. It is true. We did not establish a causal 
relationship between those. We didn't attempt to, and we did 
not. Our view, as expressed in the report, is that there were 
two things occurring at the same time. There may be a 
relationship. We didn't look at that. We will review that in 
our Fiscal Year 2023 work, but we did not establish a causal 
relationship.
    Ms. Garcia. So, you did not. You just see it as two 
separate problems?
    Ms. Sharek. Yes.
    Ms. Garcia. Okay. Thank you very much. I yield back.
    Chairman Huizenga. The gentlelady yields back. The Chair 
recognizes the gentleman from Tennessee, Mr. Ogles, for 5 
minutes.
    Mr. Ogles. Thank you, Mr. Chairman, and thank you to our 
witnesses.
    Mr. Delmar, I would like to address some troubling 
information regarding the Financial Crimes Enforcement Network 
(FinCEN). FinCEN is the primary regulator of the Bank Secrecy 
Act and is charged with maintaining government-wide data, and 
your written testimony, based on audits from your office, 
highlights significant concerns with four aspects of FinCEN: 
suppression; user access; MOUs; and monitoring. Regarding 
suppression processes, are the processes being used by FinCEN 
sufficient to protect data?
    Mr. Delmar. Not completely, sir. With many other 
situations, there isn't the regime of internal controls and 
follow-up that would be ideal, and that is, as I said, in one 
of our reports which will be issued later this year. We will 
address the specifics of that.
    Mr. Ogles. Okay. We don't have enough time to go into the 
details, but any recommendations that you or our other 
witnesses might have to improve suppression processes, if you 
could submit those to the committee, I think that would be 
ideal. Mr. Chairman, I do believe you had a couple of 
additional questions, so I yield to you the balance of my time, 
sir.
    Chairman Huizenga. Thank you. I appreciate that. Mr. 
Bialek, at the very end of my questioning, you were starting to 
say something. We were kind of on a roll about the Fed's Pilot 
Climate Analysis Program. Does your office intend to review the 
nature of this?
    Mr. Bialek. What we are doing is we are reviewing the 
Board's process as it exists today to develop and eventually 
presumably implement some activity regarding climate risks. We 
will be laying out in our White Paper what those activities 
are, what progress there has been, and how they have gone about 
doing it. And I think I was mentioning that we are going to be 
doing some benchmarking with other departments, and agencies, 
and central banks, and comparing what others have done in the 
space to what the Board has done, and make any kind of key 
considerations available to the Board as they continue to 
pursue this.
    I don't want to pre-judge or predetermine the outcome of 
that White Paper because it is in process right now, but that 
is the game plan. And I will say we decided to do this White 
Paper because obviously, this is a hot-button, controversial 
topic. We thought we are uniquely positioned to be able to kind 
of lay out the status of it, put the pieces of the puzzle 
together to explain to the public. It will be a public report 
about what has been going on and what the game plan is, and 
then also position ourselves to possibly do some further audit 
or evaluation work in this space depending on how that program 
evolves.
    Chairman Huizenga. Okay. Very quickly, in the remaining 
time, because I need to get to Ms. Sharek as well, you are 
aware of the ongoing current case pending before the Supreme 
Court regarding the funding mechanisms for the CFPB. I noticed 
in your most recent Inspector General report on management 
challenges that they are even looking into the potential impact 
on the Court's decision as to constitutionality, and they 
aren't even subject to the lawsuit. Is your office looking into 
this as well, and if so, what steps have you taken?
    Mr. Bialek. Because the matter is going to be presented and 
will be pending before the Supreme Court, we have not gone 
ahead and done any assessment of the potential impact of a 
decision from the Supreme Court on the CFPB's funding because 
it depends a lot on the rationale, obviously which way they 
decide, but also on the rationale for any decision.
    Chairman Huizenga. Okay.
    Mr. Bialek. Once we have that, we will be in a better 
position to make that assessment.
    Chairman Huizenga. Okay. You might want to start thinking 
about it.
    Ms. Sharek, last week, we learned that SEC employees will 
officially return to the office at the end of the month. 
According to reports, they will be required to be in the office 
2 days per pay period. That is twice a month as per the pay 
period, so basically an average of 1 day a week. We also know 
that the SEC plans to move into a new 1.2-million-square-foot 
headquarters in Washington, D.C., which can accommodate 4,500 
employees at one time. Given these new developments, will your 
office be reviewing the SEC's lease agreement as part of your 
audit plan?
    Ms. Sharek. We will certainly take that into consideration. 
We did not have that on our plan, but I take your point.
    Chairman Huizenga. It would seem, having a background in 
real estate and construction, that that is very valuable real 
estate in downtown D.C., and there is going to be a pretty 
penny paid, and if we aren't even filling that with the 
employees, that is a problem.
    The gentlewoman from Georgia, Ms. Williams, is now 
recognized for 5 minutes.
    Ms. Williams of Georgia. Thank you, Mr. Chairman, and thank 
you to all of the witnesses who are here with us today. The 
programs that the institutions represented here today oversee, 
audit, and investigate, supported Americans in every 
congressional district, including people of color, working 
families, and many minority business owners during the 
pandemic. Congressional Democrats, putting people over 
politics, created these lifesaving programs that were critical 
to uplifting communities and supporting the most marginalized. 
As we continue to move towards a strong recovery, we need to 
keep a watchful eye on these programs to make sure that they 
are supporting the people that they were intended to support. 
The resources that these programs offered put children back in 
school, kept businesses open, kept people employed, and kept 
families in their homes.
    We have all seen the data that shows how communities of 
color were disproportionately impacted by the pandemic, leading 
to a greater need for resources. My hometown of Atlanta, 
unfortunately, felt this more severely than any other city in 
America, as we lead the nation in the racial wealth gap. Under 
Democratic leadership, this committee strongly supported CDFIs 
and MDIs, recognizing the importance of diverse and mission-
driven community financial institutions for marginalized 
communities. In recent years, the number of CDFIs in Atlanta 
and across Georgia have multiplied rapidly, offering a lifeline 
for many business owners, homeowners, and others seeking 
capital in our communities.
    But we have heard concerns that some firms were receiving 
certifications but were not truly focused on providing 
financial access to underserved communities. In response, the 
CDFI Fund took steps to overhaul the certification process. We 
can't allow firms to receive assistance meant for true CDFIs if 
they are not going to do the work.
    Mr. Delmar, your office is overseeing these efforts. What 
are your office's plans to examine CDFI and MDI programs that 
are intended to strengthen these institutions and ensure that 
funds are going to underserved communities, including 
communities of color, that traditional financial institutions 
often ignore?
    Mr. Delmar. We have a number of audits that have either 
been accomplished or are underway. We have specific 
responsibility for looking at the CDFI Rapid Response Program, 
and we are certainly open to additional targeted work. After 
this hearing, I can send you a fuller description of the work 
that we have done and are doing. You are one of our 
stakeholders, so if you have particular concerns that you think 
warrant our review, we want to take that into account, and to 
the extent that we have the bandwidth to do it, we can.
    Ms. Williams of Georgia. Thank you, Mr. Delmar.
    Also, your office oversees the State Small Business Credit 
Initiative (SSBCI), which Congress renewed and expanded in the 
American Jobs Recovery Act in 2020. This committee sought to 
ensure that the sole proprietors and other small businesses had 
access to the technical assistance they needed to apply for 
SSBCI and other forms of loans and investments, allowing them 
to use that financing to grow their businesses. Georgia uses 
SSBCI funds to support five crucial programs for startups and 
other small businesses, but I am concerned that this capital is 
not reaching the business owners who need it the most.
    Mr. Delmar, how does your office plan to examine Treasury 
and the jurisdictions receiving funds to guarantee that SSBCI 
is administered consistent with congressional intent to ensure 
that the smallest and most-underserved small businesses get the 
support and financing they need? And can you provide any 
insight on how States have worked to ensure that SSBCI 
financing reaches marginalized communities?
    Mr. Delmar. As a baseline, certainly our oversight of any 
of these programs is to make sure that they are actually 
executing what Congress' intent was in the organic legislation. 
Again, as I said in response to your last question, if you will 
give me the opportunity to pull together some information on 
what we have done and what we expect to be doing, and again, 
any input that you or any other member of the committee has on 
specific concerns, we will take that into account.
    Ms. Williams of Georgia. Thank you. I will look forward to 
that follow-up.
    Also, during the pandemic, the Fed stood up the Main Street 
Lending Program to provide support for midsized companies that 
may not have qualified for PPP loans, even though there is 
still demand for small businesses to get medium- to longer-term 
financing once their PPP funds ran dry. As you may recall, 
Chairwoman Waters and others repeatedly asked the Fed to modify 
the qualifications to remove unnecessary barriers to access for 
small businesses.
    Mr. Bialek, what has your office found when looking at how 
a similar program could be better-designed to ensure that 
smaller businesses have access to financing in future 
emergencies? And you might have to send me this in writing, 
since I am out of time.
    Mr. Bialek. I would be happy to.
    Ms. Williams of Georgia. Thank you so much. I yield back, 
Mr. Chairman.
    Chairman Huizenga. Thank you. The gentlelady's time has 
expired. The Chair recognizes the gentleman from Pennsylvania, 
Mr. Meuser, for 5 minutes.
    Mr. Meuser. Thank you very much, Mr. Chairman. And thank 
you very much to our witnesses for being here.
    Ms. Sharek, as the Deputy Inspector General at the SEC, 
would the SEC enforce ESG mandates which require investment 
banks or banks to renege on their fiduciary responsibility to 
their investors?
    Ms. Sharek. That is not an issue that my office has 
reviewed, so unfortunately, I cannot answer that question.
    Mr. Meuser. Okay. Can we follow up on it? Thank you.
    Ms. Sharek. Yes.
    Mr. Meuser. Also, Ms. Sharek, in the February 15th report 
from the Office of Audits about the timeliness of enforcement 
actions, the report found that timeliness had improved from 
2016 to 2021. It is a little concerning related to special 
purpose acquisition companies (SPACs) because I am hearing from 
many retail investors and special purpose acquisition companies 
that they are very concerned with the length of time that their 
investments are being held in limbo because of prolonged SEC 
enforcement actions. It has been reported to me that the SEC 
barely communicates, but does not communicate at all about the 
status of this enforcement. Has your office conducted any 
audits related to the SEC's treatment of SPACs?
    Ms. Sharek. No, we have not.
    Mr. Meuser. Okay. Is that something we can provide you 
information on and perhaps you could?
    Ms. Sharek. Yes, we would be happy to discuss your concerns 
with you.
    Mr. Meuser. Great. And again, I am receiving information 
that the approval process at the SEC has taken quite a bit 
longer for this than the average case. And in many cases, the 
SEC deals with many high-profile deals, which we hear about, 
including those that may have a political partisan-ness to them 
and are somewhat subjective and/or controversial. Are you aware 
of any unusually-lengthy applications under the review and 
communications that are currently pending before the SEC?
    Ms. Sharek. No, I don't have the information on those 
issues.
    Mr. Meuser. I see. Okay. Well, there is data from industry 
groups specialized in the S-4 filing process. They have 
reported that the average time for the SEC to process this form 
was 82 days in 2020, and up to 134 days last year. Yet, I have 
reports that there is one particular case in which the SEC has 
not made a determination for over 500 days, with no 
explanation. Can you try to explain that?
    Ms. Sharek. Again, these are not issues that my office has 
reviewed, but we would be happy to get back with you on any 
information that we may have in other components of our office. 
It is just not something that I am prepared to speak on today.
    Mr. Meuser. Sure.
    Ms. Sharek. My office hasn't looked at those issues.
    Mr. Meuser. Okay. So, we can submit to your office this 
specific case and ask for you to conduct an oversight and 
response?
    Ms. Sharek. Again, yes. That is not something that my 
office has looked at, so I don't have any information.
    Mr. Meuser. Okay.
    Ms. Sharek. We are happy to continue discussing with you 
and your staff what your concerns are, and if there is a way 
that we can produce some meaningful work in that area, we will 
take that into consideration.
    Mr. Meuser. Okay. I am going to yield to my colleague, Mr. 
Ogles, my remaining minute-and-a-half.
    Mr. Ogles. Mr. Delmar, in 2018, the BPI conducted a 
comprehensive study to help determine if the resources that 
banks put towards anti-money laundering compliance were 
providing law enforcement with useful data. BPI found that 
participating banks meant roughly $2.4 billion and employed 
roughly 14,000 individuals for AML regulatory compliance. 
Despite those high costs, BPI found that only 4 percent of 
suspicious activity reports and 0.44 percent of currency 
transactions warranted law enforcement follow-up. FinCEN has 
about 470 memorandums of understanding with law enforcement and 
intelligence components. Once an agency has been approved, what 
are the issues that you see with MOUs and continued compliance, 
and, of course, the financial burdens therein?
    Mr. Delmar. The issues we see specifically with the MOUs is 
that many of them are very, very old. They need to be updated. 
It needs to be clear what the actual rights and 
responsibilities are of the participants in the MOUs. Overall, 
sir, the problem is that FinCEN doesn't have as much control 
over what gets done with the BSA information once it is 
distributed, what further uses it gets put to. And that is the 
nature of the findings that we have put together, that we have 
shared with FinCEN management, and that will be coming out in 
the reports later this year.
    Mr. Ogles. Thank you, Mr. Delmar. Mr. Chairman, I yield 
back.
    Chairman Huizenga. The gentleman's time has expired. At 
this time, the ranking member of the subcommittee, the 
gentleman from Texas, Mr. Green, is recognized for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman. I thank the witnesses 
for appearing today, and I would like to, if I may, take a 
moment to talk just a bit about what occurred with the 
pandemic. In 2022, we surpassed 1 million deaths to the 
pandemic. I traversed the streets in Houston, Texas. There were 
very few vehicles on the street. Businesses were closed, not 
all, but a good many. People were concerned about paying the 
rent. They were concerned about paying their mortgages. People 
were afraid. It was a pandemic, a global shutdown.
    My assumption is that you are not here today to tell us 
that we shouldn't have provided money directly to people to 
assist with rent, and mortgages, and food on the table, and 
keeping their homes, and avoiding eviction. You are not here to 
tell us that we shouldn't have done that, are you? If you are 
here to tell us this, raise your hand.
    [No response.]
    Mr. Green. Let the record reflect that no hands are up. You 
are not here to tell us that we shouldn't have spent some 
$792.6 billion to support small businesses, are you? If so 
raise your hand.
    [No response.]
    Mr. Green. Let the record reflect that no one has raised a 
hand. And surely, you are not here to tell us that we should 
not have spent the $29.6 billion in emergency rental 
assistance, assisting 6.5 million households, keeping people in 
their homes, with a roof over their heads. You are not here to 
tell us that we shouldn't have done that, are you?
    [No response.]
    Mr. Green. My suspicion is that the pandemic was something 
that we had to fight by spending money. I say, my suspicion, 
but it is a fact. We did. We spent $47.8 billion testing, 
performing contact tracing, and mitigation. You are not here to 
tell us that that was a bad idea, are you? If so, raise your 
hand.
    [No response.]
    Mr. Green. Let the record reflect that no one has raised a 
hand. Here is my point. I am not going to allow the perfect to 
become the enemy of the good. There were many good things done, 
many good things, and many of us have been criticized, as 
Democrats, for doing these good things to protect the American 
people when we had a global pandemic. How on earth could we 
have had the people of this country believe that their 
government was doing what it was supposed to do without 
providing assistance? People expect the government to step in 
and be of assistance when they can't work because we told them 
not to go to work, when they couldn't pay the mortgage payments 
because we required that they stay home. This is what people 
expect from the government, that we will do these things. So, I 
am exceedingly proud of the way my Democratic colleagues and I 
were the adults in the room and decided that we would do what 
was right for the American people.
    Yes, there were some mistakes made along the way, but if 
you are going to talk about mistakes made along the way and you 
are going to develop best practices, you ought to look at the 
entirety of the picture and all of the mistakes if you are 
going to have best practices, and that is what we should look 
for here in Congress. So, I thank you for appearing, and I 
yield back the balance of my time.
    Chairman Huizenga. The gentleman yields back. The Chair 
recognizes the gentleman from West Virginia, Mr. Mooney, for 5 
minutes.
    Mr. Mooney. Thank you, Mr. Chairman. Mr. Bialek, your 
office has no small task. You oversee two independent agencies, 
the Federal Reserve and the CFPB. Typically, I understand your 
time is split 60-40 in favor of the Federal Reserve, but most 
recently, maybe more like 70-30, following the pandemic lending 
programs that were mentioned. The CFPB, however, has a unique, 
and frankly, I believe, unconstitutional funding structure, 
taking funds from the Federal Reserve rather than through the 
annual appropriations process from Congress. This insulates the 
CFPB from, really, congressional oversight.
    In Fiscal Year 2022, the CFPB requested $642 million from 
the Federal Reserve for operating expenses, a record high, yet 
the CFPB's unobligated funds or leftover funds have only 
increased over the past several years, more than doubling from 
2018, now $228 million. In fact, the only time the CFPB spent 
down any of its unobligated funds was under Acting Director 
Mick Mulvaney, who wisely decided to use those funds instead of 
requesting more when it was not needed.
    So, Mr. Bialek, can you explain why the CFPB keeps 
requesting record transfers from the Federal Reserve, while the 
amount of leftover funds continues to grow?
    Mr. Bialek. We haven't done a deep dive into, for example, 
financial statement analysis of how they handle their funds. If 
there are some concerns about them having violated any 
statutory provision or regulation, that is something we would 
be interested in hearing about, and we would follow up on.
    Mr. Mooney. Okay. Thank you. I would encourage you to look 
into that. Now, let us turn to some kind of a slush fund or a 
witch hunt organization under Director Chopra, and let us, 
frankly, hope that the Supreme Court does the right thing by 
concluding that their funding structure is unconstitutional, 
and we can bring real accountability through Congress to that 
Bureau as well. But, Mr. Bialek, 20 agencies with similar or 
smaller operating budgets than the CFPB have a dedicated 
Inspector General for each agency, not shared with other 
agencies, so I would like some assurance, how are you ensuring 
that the CFPB has proper oversight?
    Mr. Bialek. We take a look at our management challenges 
that we have identified for the CFPB, and we look at kind of a 
risk analysis of the programs and operations of the CFPB. We 
look at financial risk, we look at reputational risk, 
operational risk, and match that with the management challenges 
that we have already determined are the areas which, if they 
don't satisfactorily address them, they are in jeopardy of not 
being able to successfully carry out their mission.
    We will be adding more work to our CFPB work plan in terms 
of audits and evaluations now that we see the pandemic work 
lessening, and I fully suspect that the ratio between the work 
we do with the Board and the Bureau will come closer to the 
same percentage. As always, I encourage any member of this 
subcommittee to get ahold of us and let us know if there are 
some risk areas as you see them that we should take into 
consideration as we do our work plan for the coming year. We 
would welcome those conversations.
    Mr. Mooney. Okay. Great. Thank you for that response, and 
you might be hearing from me on some specifics. My last 
question would be, let me first say the CFPB, in my opinion, 
has rightfully been criticized, based on our first discussion, 
about going outside their rulemaking, outside their authority. 
They have rightfully been criticized for regulating through 
press releases, blog posts, and changes to its examination 
manual, clearly violating the CFPB statutory authority, and 
notice-and-comment requirements for rulemaking. So, is your 
office reviewing how the CFPB is using every possible avenue to 
circumvent the traditional rulemaking process?
    Mr. Bialek. Congressman, the IG community is prohibited 
from delving into or weighing into policy disputes, policy 
differences of view. If we do engage in that, it throws up a 
roadblock in terms of our ability to be viewed as objective, 
and going in and auditing or evaluating the programs and 
operations which evolved from that policy. So, we have to make 
a distinction between what are policy-based issues versus what 
is fraud, waste, abuse, and illegality in terms of how an 
agency is conducting itself. That would be my kind of high-
level answer to your question.
    And also, some of those policy issues I think you are 
alluding to are matters that are in litigation, and that is 
another area that IGs are mindful not to wade into. We are not 
judges or juries in terms of interpreting the law. So with 
those provisos, I would say that any other types of concerns 
you have, we would be happy to discuss with.
    Mr. Mooney. Okay. I think my time has expired.
    Chairman Huizenga. I would like to thank the witnesses for 
their testimony today.
    The Chair notes that some Members may have additional 
questions for this panel, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to these witnesses and to place their responses in the record. 
Also, without objection, Members will have 5 legislative days 
to submit extraneous materials to the Chair for inclusion in 
the record.
    And with that, I appreciate the participation from all of 
my colleagues, and certainly, we appreciate the participation 
of our witnesses.
    This hearing is adjourned.
    [Whereupon, at 3:51 p.m., the hearing was adjourned.]

                            A P P E N D I X


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