Richard Cordray for the first time in two years can claim he is the confirmed leader of the Consumer Financial Protection Bureau – a situation that ultimately creates certainty for the bureau and for financial firms bracing for an onslaught of new mortgage rules in 2014.
For Allyson Baker, a partner at Venable law firm and a former lead counsel in one of the CFPB’s first enforcement actions, Cordray’s nomination is just what the market needs as lenders and servicers prepare for the launch of the qualified mortgage rule, new servicing standards and a variety of other rules.
Baker has a unique perspective since she served the CFPB prior to joining Venable, working inside the agency’s enforcement unit during the bureau’s fledgling beginnings.
"One of the things that is ultimately beneficial is there’s a lot of pillow talk of what is going to happen if Director Cordray is forced to step down because his recess appointment expires," Baker says.
If that had happened, many questions would have surfaced about what happens to current and past examinations, nonbank supervision and rules finalized under Cordray’s leadership term, which began by recess appointment in early 2012.
Today’s confirmation eases some of those concerns.
"I think you now have some certainty that the work the agency has done so far will continue," Baker told HousingWire. "For the foreseeable future, you are going to see the CFPB’s agenda carried out and you are not going to have the kind of uncertainty that has been out there a while."
Even before today, lenders and servicers have been acting as if Cordray is the director and will continue to do so, Baker explained.
"I think it would be foolhardy to tell a client not to comply with the CFPB because Director Cordray might not stay there. People are already acting as if it is a permanent agency."
So what is it like working behind the doors of the CFPB when political turmoil surrounds the agency and its director?
Baker says, "I think people at the CFPB have done an admirable job of keeping their heads down and doing the work of the agency in the midst of uncertainty concerning Cordray’s confirmation."
As for lenders and servicers, what does the confirmation mean?
"It allows them to say this is what it’s going to look like, and now we can move forward because we have some certainty in the marketplace. Certainty is useful if you are trying to structure your business operations and working with fairly new paramaters," Baker added.
Still, Cordray – who came in as a recess appointment – is still the subject of a lawsuit that is very similar to a case pending at the Supreme Court challenging one of Obama’s recess appointments.
In light of that case, Cordray’s official confirmation gives CFPB supporters added security now that Cordray is backed by the majority of the Senate, Baker suggested.