Richard Cordray made his first appearance on Capitol Hill this past week in front of the Senate Banking Committee.
The Consumer Financial Protection Bureau, which was established in 2010 through the Dodd-Frank Act, assumed rulemaking authority in the summer of 2011 for a myriad of consumer financial laws previously regulated by several federal agencies, including the FDIC, Federal Trade Commission, and Office of the Comptroller of the Currency, among others. After much political discord, Cordray was recently named director of the CFPB through a recess appointment by President Obama.
Given the almost apoplectic response of Republicans to Cordray’s recess appointment, it was expected Republicans would eventually want their “pound of flesh.” Not surprisingly, in the meeting last week key members of the Senate Banking Committee once again challenged the structure of the bureau, preferring a five-member oversight panel in lieu of a single director. Additionally, they argued that funding should be subject to Congressional appropriations.
Cordray responded, “Well, I would say that we’re on the same level with every other independent federal agency in the federal government, and particularly with other banking agencies.”
In anticipation of and to help counter the cool reception of the committee, Cordray and his team came out of the gate with a noteworthy report card of CFPB’s accomplishments under their belt.
The CFPB has received more than 2,300 complaints related to loan modifications and foreclosures since they opened the portal at the beginning of this year. Companies implicated by the complainants responded to a remarkable 88% of the grievances, providing relief to consumers in many cases.
Cordray stated that the bureau has begun investigating and “assessing certain mortgage servicing companies,” but stressed he was not on a witch hunt targeting all servicers and instead was focused on the correction of problematic practices by particular servicers.
The CFPB has already begun enforcement actions on questionable lending and foreclosure practices and is actively engaged in filing lawsuits against alleged perpetrators.
Though cooperation is more the exception than the rule in Washington these days, the CFPB has already begun its efforts to streamline regulations affecting the financial community. They have actively engaged feedback from both industry pundits and consumer advocates, trying to strike a delicate balance between what is many times rival points of view.
The CFPB appears to be actively working to fulfill its mandate. Future measurements of success should be judged solely on the merits and accomplishments of the group, not on any political wrangling or petty bipartisan bickering.
Diane Gozza is executive vice president, business development at Integrated Mortgage Solutions, Houston.
