Lending

Tensions reach boiling point at CFPB Director Cordray's hearing

Here are the few comments made on mortgage finance

black and white gavel

Both sides of the aisle came to the hearing of Consumer Financial Protection Bureau Director Richard Cordray on Wednesday ready for battle, as this semiannual hearing happened in the midst of controversy around the bureau and Cordray’s position.

After more than five years in office and many times in front of the House Financial Service Committee, representatives have the system down for grilling Cordray, except this time they can draw from more than five years of history of his time at the bureau.

House Financial Services Committee Chairman Jeb Hensarling, R-Texas, and Rep. Maxine Waters, D-Calif., Ranking Member of the Committee on Financial Services, in their opening remarks, set the pace for how the rest of the hearing would play out — divided and politically tense.

Hensarling, in his opening remarks, called for Cordray to be fired, stating, “For conducting unlawful activities, abusing his authority and denying market participants due process, Richard Cordray should be dismissed by our president.”

And then right after these remarks, Waters turned around and said in her opening remarks, “I reject these misguided attacks on the Consumer Bureau, and I will continue to stand up for the hardworking American consumers that the agency defends every day. The Consumer Bureau is an invaluable ally to consumers, and its work must continue.”

Cordray is no stranger to the battlefield that semi-annual hearings have transformed into. About three years ago, Cordray even fired back at members of the committee, stating, “These are some of the most offensive questions I have ever heard coming from this Committee.”

The comment was made after Cordray grew upset over a round of questioning over the alleged impact CFPB rules are having on manufactured housing.

Now, three years later, tension is higher due to calls for his head from Congress Republicans and a pending court case between the CFPB and PHH, which calls the bureau unconstitutional.

Cordray several times fought over speaking times with representatives after they asked a question, sarcastically responding over them, “You’re not going to let me respond? Okay, thanks.”

And as a result, chunks of the hearing were spent with Republicans grilling Cordray and Democrats later yielding their time to Cordray to respond, in a back-and-forth struggle.

Several representatives even threw out the strong statement that Cordray might have one the most challenging jobs in Washington and be one of the most disliked people in Congress, which isn’t a surprise given the recent attention around the constitutionality of his organization.

Cordray had a simple response to this, “I am okay with opposition. It is a hard job because there are all these difficult issues.”

But between sarcastic comments toward each other and even Cordray, the hearing did shed some light on serious questions weighing the mortgage finance industry.

Rep. Sean Duffy, R-Wisc., interrogated Cordray on his tenure at the CFPB, bringing up the fact that Cordray has already been at the bureau for five years and three months. This issue has been brought up a few times, including during a recent HousingWire webinar, since Cordray has technically been in his position since January 2012, meaning he will actually serve longer than his five-year term, which official ends in July 2018.

In response to Duffy stating that the director was only intended to serve five years, Cordray said he disagreed and that was not the intent.

However, Duffy questioned if Cordray should simply say, “I’ve done my five years. I’ll step down.”

He also asked Cordray, “What’s the best way for you politically?”

At one point, it was rumored that Cordray was considering running for governor of Ohio in the 2018 election.

The main point that came out of the exchange before time ran out is that Cordray doesn’t think he has served too long.

The other main area representatives focused on was regulation, particularly the TILA-RESPA Integrated Disclosure Rule, TRID.

As HousingWire has previously reported, recent presidential actions on regulations from President Donald Trump call into question the future of TRID, which is still awaiting a final rule.

While Cordray is unable to comment on the timing of new rules, he did in essence say they are working on it.

Rep. French Hill, R-Ark., also questioned Cordray on TRID, an area where Hill has served as a big advocate for the mortgage industry.

After working through the nuances of why the rule was delayed, Cordray once again said that the bureau is only interested in substantial efforts in good faith to comply with the rule, which the bureau has noted in the past.

Outside of these brief claims, Republicans spent the majority of the hearing trying to disprove the constitutionality of the agency, while Democrats used their time to thank Cordray and scoff at previous comments from Republicans.

While the committee scheduled the hearing because it’s required to, the growing controversy surrounding the CFPB created a tense hearing, especially since Cordray might not still be around for another semiannual hearing.

 

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