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CFPB / RegulatoryMortgage

Hensarling to CFPB’s Cordray: Publicly confirm you’ll serve your full term

Or step down from the position

It’s been a busy year for the Consumer Financial Protection Bureau so far, proposing changes to the Home Mortgage Disclosure Act, banning mandatory arbitration clauses, finalizing the updates to the TILA-RESPA Integrated Disclosure rule and so much more. But, to House Financial Services Chairman Jeb Hensarling, R-Texas, CFPB Director Richard Cordray’s been too busy this year for someone predicted to not finish out their full term, which is slated to end July 2018.

In light of the “ever-growing list of actions, rules and regulations coming out of the CFPB over the last week,” Hensarling issued the following statement, “Back in March, I asked Director Cordray whether he would serve his full term as CFPB Director expiring July 2018, and if not, on what date he would depart from office. He avowed that he had ‘no insights to give,’ even though it is widely reported that he is considering a run for the Democrat nomination for Ohio Governor.”

“If Director Cordray wishes to issue midnight rules, to hire or adjust the status of CFPB employees, to obligate CFPB funds, or to accelerate agency investigations, he should first commit to serving his full term. If he will not do so, the honorable course of action would be to resign and leave such decisions to his successor.”

So far, despite industry rumors, Cordray hasn’t commented on the possibility of him running for the governor of Ohio.

But he still has time to decide, and if he does choose to run, he would be required to leave the bureau. Under Ohio law, Cordray can’t run for Ohio governor if he is currently engaged in politics, as an article in Cleveland.com by Andrew Tobias explained, meaning he has to put in his resignation as the leader of the CFPB.

Technically, the deadline for candidates to file their petitions for the 2018 Ohio Governor Primary is Feb. 7, 2018. However, a recent Bloomberg article explained that ideally Cordray would need to enter the race by the end of summer, well ahead of the Ohio filing deadline, but nearly a year before his CFPB appointment ends.

With summer nearly halfway over, Cordray is quickly running out of time. But looking at the all the recent CFPB actions, it doesn’t appear as if Cordray is planning to leave anytime soon.  As recent as last week, Cordray announced proposed HMDA changes for community bank and credit unions. The public comment period is open until July 31, and from there, the bureau will issue a separate proposal with a longer notice and comment process to consider adjustments to the permanent threshold at a later date. In order to be present for the above timeline, Cordray would need to be present at the bureau into the fall, which would be past the timeline for Ohio governor.

Meanwhile, the CFPB’s timing of all the updates and finalized regulations are interesting since a couple of President Donald Trump’s first moves as president were to roll back regulation and put a freeze on federal regulation. But the executive orders did not apply to the bureau.

However, the bureau could have elected to honor the spirit of both orders, which, as the industry has witnessed this year, it has not. 

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