New Consumer Chief Promises Strong Agenda
New York Times
January 6, 2012
Newly appointed Consumer Financial Protection Bureau (CFPB) director Richard
Cordray has encouraged consumers to contact the agency through its Website with
complaints about banks, payday lenders, and other financial firms they believe
have sold deceptive products or engaged in abusive behavior. The agenda outlined
by Cordray on Jan. 5 was aggressive, with Cordray noting, "The consumer bureau
will make clear that there are real consequences to breaking the law. We have
given informants and whistle-blowers direct access to us. We took over a number
of investigations from other agencies in July, and we are pursuing some
investigations jointly with them. We also have started our own investigations.
Some may be resolved through cooperative efforts to correct problems. Others may
require enforcement actions to stop illegal behavior." Cordray said he would not
hesitate to use the CFPB's rule making authority, despite concerns that his
recess appointment could be challenged legally. He intends to work with
lawmakers in both parties and said that his interests and that of lawmakers is
the "same at heart." Nonbank financial firms will become a primary focus for the
agency, including money transfer agencies, credit bureaus, and private mortgage
lenders given that nearly 20 million Americans use their services and pay about
$7.4 billion in fees annually. Cordray noted, "Many subprime loans during the
housing bubble were made by nonbank mortgage brokers. Since most of these
businesses are not used to any federal oversight, our new supervision program
may be a challenge for them. But we must establish clear standards of conduct so
that all financial providers play by the rules."
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