January 05, 2012

Cordray appointed CFPB director

Richard Cordray was appointed director of the Consumer Financial Protection Bureau by the president Wednesday in action the White House described as a recess appointment, and that could last through 2013.

There are differing points of view within the House and Senate as to whether the current break in congressional activity constitutes a bona fide "recess," but that's a question for another day. NAFCU President and CEO Fred Becker, who spoke with Cordray by phone shortly after the nomination last July, said the association looks forward to working with the new CFPB head in its efforts to mitigate the impact of CFPB rulemaking on credit unions.

Cordray, who has been running the CFPB's fair lending operation since last year, is the former attorney general for Ohio. His nomination was cleared by the Senate Banking Committee last year on a party-line vote, but Senate Republicans are blocking confirmation.

There are a number of issues at play. Among them: Key Republicans in both the House and Senate want the director post to be eliminated in favor of a bipartisan, five-member commission.

With no director in place, the CFPB's authority has been limited to the supervision, regulation and enforcement over federally insured depository institutions. Examination and enforcement authority is limited to those institutions with more than $10 billion in assets.

NAFCU has long supported having the CFPB supervise and examine non-depository providers such as payday lenders, check cashers, mortgage brokers and others, but not credit unions. It supports the commission model and also wants an easing in the Financial Stability Oversight Council's authority to turn back certain CFPB rules.

That aside, Becker called Cordray "thoughtful and deliberative" in his approach to financial industry policymaking. "He has been a good listener," the NAFCU president said.

NAFCU has been in frequent, ongoing discussions with CFPB officials and staff regarding bureau activities affecting credit unions, including the Know Before You Owe initiative on mortgage disclosures and the bureau's consumer complaint processes. It is currently drafting comment letters to the CFPB regarding the bureau's regulatory streamlining and complaint handling processes.

Obama announced Cordray's appointment during a speech Wednesday in Shaker Heights, Ohio. House Financial Services Chairman Spencer Bachus, R-Ala., criticized the move. Senate Banking Chairman Tim Johnson, D-S.D., welcomed it.