Life after the CFPB
[Update 1: Raj Date response added]
Congressman Darrell Issa, R-Calif., and other Republican members of the House Oversight and Government Reform Committee are publicly questioning the nature of a new advisory firm developed by former employees of the Consumer Financial Protection Bureau.
Rep. Issa, who chairs the House Oversight and Government Reform Committee, sent a letter to CFPB Chairman Richard Cordray, raising concerns about conflicts of interest in the wake of four former CFPB executives leaving the firm.
Issa points to a new advisory and investment firm, Fenway Summer, which he notes was incorporated by Raj Date, the former deputy director for the CFPB.
Other former CFPB officials mentioned in the letter include Gary Reeder, Chris Haspel and Mitch Hochburg – all of whom Issa says left the CFPB to join Date.
“Simply put, it appears that former CFPB employees are now offering financial products in a market sector created by the very rules they were in a position to influence while working in senior leadership positions at the CFPB,” the lawmakers claimed in a public statement.
Specifically, the House Oversight Committee members expressed reservations about Date and the former employees creating a firm that has the potential to profit off the future mortgage lending space, given their previous involvement in drafting Dodd-Frank era rules.
The letter suggests the firm incorporated by Date will focus on borrowers who do not meet the qualified mortgage (ability-to-repay) standard set up by the CFPB.
The CFPB released a statement on the letter Friday. "In crafting our mortgage rules the bureau engaged in a transparent process, with extensive public input and outreach to stakeholders," the CFPB said. "As a result, our new rules create important new consumer protections and help establish a foundation for recovery in the mortgage market."
The members of the House Oversight Committee asked CFPB Director Richard Cordray for all communications between Date, Reeder, Haspel and other officials related to the qualified mortgage rule.
In addition, the committee members want copies of CFPB attrition rates on an annual basis and information on departing employees' new employers.
The letter also requests documents or communications between Date and any CFPB employee that may be related to the creation of Fenway Summer and any communications between CFPB and Fenway Summer employees.
Raj Date released a public statement Friday:
“I'm proud of my public service career. I was part of a team that focused on carrying out Congressional intent, listened openly to lots of points of view, and tried to create transparent rules of the road for the marketplace. Now I'm back in the private sector, and I'm 100% focused on building a great business: great products, at great prices; to build great customer relationships.”
Click here to read more and access the letter.