Tuesday, June 19, 2018
Business

Q&A: Richard Cordray discusses Consumer Financial Protection Bureau's first year

WASHINGTON — Richard Cordray has a message for opponents of the Consumer Financial Protection Bureau: Neither he nor the new watchdog agency is going away.

The bureau celebrated its first anniversary Saturday with opponents still trying to shut it down — or at least weaken its power.

Instead, the bureau flexed its muscle for the first time last week. It joined with another banking regulator to order Capital One Bank to pay $210 million in refunds and fines to settle allegations of deceptive marketing tactics to credit card customers.

Cordray, 53, was installed as CFPB director by President Barack Obama in January with a controversial recess appointment after nearly all Senate Republicans vowed to block any nominee unless the bureau's authority was reduced.

A pending lawsuit challenges the constitutionality of both the appointment and the bureau's creation, which was the centerpiece of the 2010 financial reform law. In addition, many lawmakers and financial executives continue to worry that the new oversight and regulations will hurt business and stifle lending to consumers.

Cordray, a soft-spoken former Ohio attorney general, acknowledged the continued controversy. He said he is trying to ease those fears by taking "a measured and careful approach."

Still, activity at the bureau's offices near the White House has ramped up since Cordray's appointment.

Cordray spoke with the Los Angeles Times about the bureau's initial year and his priorities going forward. Here are excerpts:

What has been the biggest success and the biggest failure for the bureau?

I think we have been doing a good job in fixing a direct pipeline between us and the consumers so that we're hearing regularly and constantly from them, and we are establishing communication from them to give them the kind of information they need. I think we have accomplished a lot in a short time. … I think we underestimated the sheer magnitude of the task involved in building an agency from scratch.

What's the biggest threat to consumers right now, and what is the agency doing to address it?

We're involved with the mortgage market really from beginning to end. When you first think about a mortgage and apply for a mortgage, we've been working on the Know Before You Owe project, which is rendering that whole process more accessible to consumers and making the prices and risk clearer.

The qualified mortgage rule is extremely important. That addresses that many consumers were being set up to fail in the mortgage marketplace, and some of the terrible underwriting, the no-document loans. … Frankly, if we had that five, six years ago, the problems wouldn't have been nearly as severe for people that they've experienced across the country.

There still seems to be a lot of animosity about this agency and a lot of questions about what it does. Are you surprised that hasn't dissipated by now?

No, I'm not surprised. I think these things will dissipate over time. … And what happens over the course of time is people begin to reconcile themselves to a new order and the law of the land.

When we respond to someone who has a foreclosure problem, they're very likely contacting their congressional office as well. And as people can see that we're adding value here, I think that wins the day over time.

Do you think the recess appointment is a complicating factor in that animosity?

If I hadn't been appointed, we still wouldn't have a director, and it would be very hard for us to do the kind of work we're doing. I'm not really focused on that. We're focused on doing our work and trying to avoid any kind of distraction or taking our eye off the ball.

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