Consumer Financial Protection Bureau Director Richard Cordray told a group of mayors his agency will partner with municipal governments to detect bad actors in the financial services space.
“You know better than anyone who the predatory lenders are in your communities and we want to work with you to identify them,” Cordray said at the Conference of Mayors in Washington.
With CFPB now empowered to enforce rules impacting non-bank lenders, Cordray advised the nation’s mayors to report local lending practices that threaten neighborhood stability.
“Sometimes the responsibility for a spiraling debt resides with an individual,” Cordray said in prepared statement. “Sometimes it rests with financial service providers that ensnare their customers in complex products they don’t understand.”
Cordray told the group individual financial problems can turn into community problems when neighborhoods become riddled with vacant, foreclosed properties.
He said mortgage scams went unnoticed in the years leading up to 2008, creating distress in once stable communities.
“When we saw real estate flipping scams exploding on a mass scale and could not get the attention of federal officials, we knew we were in serious trouble,” he said.
The CFPB said it will work with cities by providing them with educational materials for citizens and a place to call if they notice predatory or unsafe lending practices.
Write to Kerri Panchuk.