President Obama meets with CFPB staff after Cordray appointment
President Obama visited the Consumer Financial Protection Bureau Friday, two days after making a controversial recess appointment of Richard Cordray as its first director.
The president's statements were brief and revealed nothing new about what the president expects from the agency — other than to oversee nonbank firms and players in the student loan, payday lending and mortgage space.
"Just to be a little more specific, millions of working Americans use financial products like credit cards and student loans and mortgages -- and that’s a good thing," the president told CFPB staffers.
"These products have a tremendous potential to make people’s lives better — to buy products, to earn an education, to afford a home, to raise a family. And we all use them. But when they’re sold in an irresponsible fashion they can also make life brutally hard on people. They can turn the dreams of a family into a nightmare. Things like hidden fees and traps on credit cards and student loans cost working Americans billions of dollars. Things like subprime loans and skyrocketing interest that you can’t escape cannot only bring families to their knees but the entire economy to its knees."
The bureau, which has been criticized for installing power in one director, received full regulatory authority to enforce lending regulations passed under the Dodd-Frank Act with the Cordray appointment.
The president praised the "Know Before You Owe" campaign launched by the bureau's architect Elizabeth Warren. Last year, the campaign produced prototype mortgage applications with more detailed disclosures for borrowers.
The bureau went live on July 21, 2011, but has remained without a director. Installing Cordray as director this week was described by opposing lawmakers as a tactical move by the president to avoid a Senate confirmation.
Lawmakers opposing the appointment object to the bureau's single-director structure and funding setup.
Obama noted Friday that the bureau with Cordray in place now has official policing power in the nonbank segment.
"And now that Richard is your director, you can finally exercise the full power that this agency has been given to protect consumers under the law," he said. "Now that he’s here, irresponsible debt collectors and payday lenders and independent mortgage servicers and loan providers, they’re all bound by the same rules as everybody else. No longer are consumers left alone to face the risk of unfair or deceptive or abusive practices -- not anymore."
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