New Consumer Chief Promises Strong Agenda

New York Times
January 6, 2012
Wyatt, Edward
P. B3

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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