Login
Consumer Financial Protection Bureau (CFPB) Director Richard Cordray appeared before the House Financial Services Committee yesterday for the first time since September of last year, to provide a semi-annual update on behalf of the agency. In the much-anticipated hearing, Cordray stood by CFPB decisions and was, as expected, flooded with criticisms.
Chairman of the House Financial Services Committee Jeb Hensarling (R-TX) began the hearing with an introduction, during which he expressed, “In short, Congress has made Mr. Cordray a dictator. And when it comes to the well-being and liberty of American consumers, he is not a particularly benevolent one.” Hensarling went on to denounce a proposed CFPB mortgage rule that would disqualify one-fourth of Americans who had qualified for a mortgage just a few years ago. Besides this mention by Hensarling, and Cordray’s refusal to identify an end or extension to the TRID grace period, there was little talk of the mortgage industry.
Congresswoman Maxine Waters (D-CA) followed Hensarling and gave Cordray her vote of confidence. Waters stated, “They [accomplishments] are reflected in the 830,000 consumer complaints you have handled on issues from debt collection to credit reporting. They are reflected in the increased share of mortgages made to minority borrowers in recent years and the expansion of access to credit cards, despite Republican claims to the contrary. Director Cordray, you are helping consumers succeed to the benefit of the entire financial system.”
Among the topics hurled at the director were the CFPB’s proposal to enact federal regulations on payday loans; agency initiative to limit mandatory arbitration clauses in financial contracts, possibly preventing consumers from participating in class-action lawsuits; the adverse effects of the agency’s regulations on credit unions; the Bureau’s work in determining discrimination in auto lending; and discrimination within the CFPB itself, as Representative Sean Duffy (R-WI) highlighted that African Americans are paid $16,000 less than white employees within the agency.
“Over this reporting period, the Bureau’s continued to expand its efforts to support and protect consumers in the financial marketplace. Recent data indicate that sound consumer protections in our major markets are strengthening them for consumers and providers alike. The mortgage market has been expanding briskly for two years now, since our major rules took effect,” Cordray articulated about the CFPB’s proposals and regulations. “The growing sense of consumers that these markets can actually work for them without fear of tricks and traps and other predatory conduct, is stoking their confidence and restoring their trust. These developments reflect well on the work being done by the consumer bureau, and taken as a whole, they’re making substantial contributions to the continued gradual recovery in the American economy.”
Above all, the hearing emphasized the truth that bringing change to the consumer market is incredibly difficult, despite CFPB intentions and the fact that all opposing parties claim to have the consumer’s best interest in mind. To watch the hearing in it’s entirety, please click here.