Consumer Protection Agency Countdown Begins, Still No Director

Despite being less than six months away before the enactment of the Consumer Financial Protection Bureau (CFPB), the agency still doesn’t have a permanent director.

Americans for Financial Reform (AFR), a collection of consumer advocates, published a report on Friday that praised the “significant progress” made by the bureau, but called on President Obama to appoint a director of the agency.

“The president should nominate and the Senate should confirm a qualified director of the bureau as soon as possible,” the group said in the report.  “This will ensure that the bureau gains its full authorities to protect the public by the transfer date.”  AFR cited Ms. Elizabeth Warren as “certainly one potential nominee” who was well qualified.

President Obama tapped Warren in September to lead the agency on a temporary basis, but without a Senate-confirmed director by the designated transfer date (July 21,2011), the Treasury Secretary is not permitted to exercise the Bureau’s authority to supervise nonbank lenders that extend credit and write rules for consumer products like mortgages and credit cards.

Getting a nominee confirmed through the Senate is no easy task.  Republicans have vowed to scrutinize the bureau’s every move and the AFR warned that “it must defend itself against ongoing special interest attacks and one‐sided Congressional inquiries.”

The CFPB could have a big impact on the way reverse mortgages are offered to consumers.  An unnamed source at the bureau told the Wall Street Journal the agency has started to look into the products and plans to build on the Federal Reserve and GAO’s efforts to improve disclosures and prevent misleading advertising.

As part of Dodd-Frank, the agency is also required to conduct a study on reverse mortgages to identify deceptive practices and figure out whether suitability standards are necessary.

To view a copy of the report, see here.

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