Consumer Financial Protection Bureau Director Richard Cordray announced in an email to the bureau’s staff that he will be stepping down from his position before the end of the month, and many in the housing industry are rejoicing at the decision.
One expert from international law firm Dorsey & Whitney, explained the administration will likely soon nominate a director who will closer consider the needs of the industry.
“This decision on the part of the director now allows the administration to appoint an individual who can balance the needs of consumers with those of the industry through competent management,” Dorsey & Whitney Partner Joseph Lynyak said.
Lynyak pointed out it is unclear what this new development would change for the CFPB’s pending cases.
“The interesting legal question that is now presented is whether a patty to the PHH litigation will move to dismiss the case as being moot, at least as to the constitutional questions,” he said.
Ocwen Financial recently sued the bureau over whether the structure of the CFPB is unconstitutional, which is also currently in question in a legal battle between the CFPB and PHH Corp. The CFPB also recently attracted an unlikely opponent in the Department of Justice.
One expert, who regularly briefs Congressional staff, members of Congress, SEC Commissioners and other financial regulatory agencies, agreed, saying the bureau will now be able to focus its efforts on areas where it failed over the past several years, such as the Wells Fargo fake accounts scandal.
“The change in leadership should help the agency focus on diligent enforcement of fraud laws, which it failed to do for years in the Wells Fargo case,” said J.W. Verret, a senior affiliated scholar at the Mercatus Center at George Mason University. “The agency’s focus on actions outside of enforcement have cost the American taxpayers millions of dollars, while still leaving them vulnerable to fraud.”
Members of Congress also weighed in, such as House Financial Services Committee Chairman Jeb Hensarling, R-Texas, who said the CFPB has done more to hurt consumers than help them, saying the bureau is long overdue for new leadership.
— Financial Services (@FinancialCmte) November 15, 2017
However, as could be expected, Democratic members of Congress stood by the director, thanking him for his service at the bureau.
“Richard Cordray is a true champion for American consumers,” Ranking Member of the House Committee on Financial Services Maxine Waters, D-Calif. “Under his outstanding leadership, the Consumer Bureau has made the financial marketplace stronger and fairer for hardworking Americans across the country.
“As the first Director of the Consumer Bureau, he has overseen the implementation of much needed rules on mortgages, prepaid cards, and payday and auto title loans, clamping down on unfair practices and ensuring that consumers are not ripped off,” Waters said. “The Consumer Bureau has provided $12 billion in relief for nearly 30 million consumers who have been harmed by financial institutions, and handled over 1.3 million consumer complaints.”
“During his time leading this important agency, he has made a tremendous, positive impact that cannot be overstated,” she said. “I thank Mr. Cordray for always standing up for all Americans and standing up to abusive financial institutions.”
Sen. Elizabeth Warren, D-Mass., also thanked Cordray for his time at the bureau, adding that the new opening is no place for a “Trump-appointed industry hack.”
The new Director of the @CFPB must be someone with a track record of protecting consumers & holding financial firms responsible when they cheat people. This is no place for another Trump-appointed industry hack.
— Elizabeth Warren (@SenWarren) November 15, 2017
And not everyone in the housing industry was lined up to kick Cordray on his way out the door. The Mortgage Bankers Association congratulated the director on his “successful tenure” and explained what will be needed from the new director.
“I want to congratulate Director Cordray on a successful tenure at the CFPB,” MBA President David Stevens said. “He came into the position during a tumultuous time and was successful in solidifying the role the bureau plays in protecting consumers.”
“As we now pivot to the nomination of a new director, it will be imperative that someone is chosen who can provide a balance between the rulemaking process and the need for clarity and consistency in the direction and guidance given to lenders across the country,” Stevens said.
And now, some experts are beginning to speculate about the director’s next move, of which he made no mention of in his letter on his resignation.
"If Rich Cordray runs for governor of Ohio, he would be a very strong candidate,” said Adam Green, Progressive Change Campaign Committee co-founder. “With his record of advocating for consumers against predatory banks and credit card companies, an agenda popular with Democrats, Independents and Republicans, Cordray would tap into the economic populist vein of the electorate that Sherrod Brown and Donald Trump both tapped into in Ohio. We would hope to see a race to the top on these issues in the primary.”