CFPB Director Cordray Receives Less than Warm Welcome in Congress
Earlier this week, Richard Cordray, Director of the Consumer Financial Protection Bureau (CFPB), testified before the Senate Committee on Banking, Housing and Urban Affairs to provide the agency’s semi-annual report to Congress. As has been the case in previous CFPB congressional hearings, Director Cordray faced a relatively hostile audience. During the hearing, senators from both sides of the aisle criticized the CFPB’s sluggish implementation of essential regulations and reports, its pursuit of unnecessary regulations and excessive spending.
Several members of the Senate Banking Committee expressed concern with the timing of regulatory priorities. The CFPB said it would be delayed in issuing a rulemaking on prepaid cards. According to the agency’s own regulatory agenda, the rules were supposed to be published this month. Responding to questions about the CFPB’s delayed regulation of payday lending and other forms of high-cost, short-term lending, Director Cordray said, “it is taking us somewhat longer … to address this, but I think its well worth a little additional time.”
Committee members also expressed concern with the rapid expansion of student loan debt. Director Cordray did not appear to have a concrete timeline for the issuance of corrective regulations in the student loan market. During the hearing, Cordray said he did not know whether CFPB research and investigations would lead to specific standards or not.
Deviating from his Democratic committee members Republican Senator Mike Crapo (R – ID) cautioned against overly burdensome regulations. Senator Crapo encouraged the CFPB to perform a better cost-benefit analysis of its regulations and said he was “concerned that many of the CFPB’s recent proposals and actions will continue to push mainstream financial products into unregulated areas, diminish consumer choice, and make certain products unaffordable.” Director Cordray even fielded inquiries into the costs of the renovations for the agency’s headquarters, which have increased from $145 million to an estimated $185 million.
The discourse of the hearing clearly illustrates that the CFPB continues to face tough criticism from Congress. The agency has its work cut out for itself, attempting to balance a lengthy regulatory agenda without overly burdening consumers and the private sector.
- CFPB Semi-Annual Report to Congress – http://www.banking.senate.gov/public/index.cfm?FuseAction=Hearings.LiveStream&Hearing_id=6ef4e74a-2eee-4b69-a978-9e821fd3c599
- Senator Crapo’s Statement on Hearing – http://www.banking.senate.gov/public/index.cfm?FuseAction=Newsroom.MinorityNews&ContentRecord_id=3e91bf59-c37b-1005-52d1-f04964ee310b
- Senator Johnson’s Statement on Hearing – http://www.banking.senate.gov/public/index.cfm?FuseAction=Newsroom.PressReleases&ContentRecord_id=4551cb5d-bfcd-da2c-4f22-19c10d57976e
- CFPB Semi-Annual Report – http://www.consumerfinance.gov/reports/semi-annual-report-spring-2014/