The nominee to be the first director of the Consumer Financial Protection Bureau said he prefers to use “supervisory tools” as opposed to litigation to enforce consumer protection laws.
Former Ohio attorney general Richard Cordray says in prepared testimony that the bureau has a "range of tools" that are not available to state attorneys general.
"I know from my experience that lawsuits can be a very slow, wasteful, and needlessly acrimonious way to solve a problem," Cordray writes.
The FHFA nominee is slated to testify at his confirmation hearing before the Senate Banking Committee Tuesday afternoon at 2:30 p.m.
"The supervisory tool, in particular, offers the prospect of resolving compliance issues more quickly and effectively without resorting to litigation," he says.
Cordray was one the first AGs to sue the nation's megabanks over robo-signings and foreclosure-related issues. "We pursued those mortgage servicers who, despite strong warnings, repeatedly violated consumer protection laws,” he says.
The former AG is currently in charge of CFPB's enforcement office.
The CFPB is responsible for the supervision and enforcement of consumer protection laws with respect to the 110 largest federally chartered depositories, as well as nonbank mortgage lenders.
The agency's supervisory authority over certain nonbank lenders and financial service providers is limited until a CFPB director is confirmed by Senate.
Sen. Republicans, led by Sen. Richard Shelby, R-Ala., have pledged to block Cordray's nomination until the Obama administration agrees to restructure the CFPB into a five-member commission that gives Congress the power to set its annual budget. The bureau currently is funded independently by the Federal Reserve Board under a formula spelled out in the Dodd-Frank Act.
