New CFPB chief Cordray to testify before House panel
The newly appointed director of the Consumer Financial Protection Bureau will testify before a House subcommittee Jan. 24, according to a spokesman for Rep. Patrick McHenry, R-N.C. McHenry chairs the subcommittee covering the Troubled Asset Relief Program and other bailout funds. He criticized President Obama for his appointment of Richard Cordray while Congress was in recess and invited the former Ohio attorney general to testify. "As you begin your tenure as the director of the CFPB, the subcommittee is deeply interested in how you will implement and enforce the unparalleled powers of your new office," McHenry wrote in a letter to Cordray. Senate Republicans blocked a vote on Cordray since his nomination in July. They demanded reforms such as a five-member commission be installed at the top of the bureau instead of a director. They also wanted congressional control of the CFPB budget and to provide the Financial Stability Oversight Council a majority vote to overturn any bureau rule instead of the current two-thirds vote. "As America's consumer watchdog, Cordray will work to ensure that families and students don’t get saddled with sky-high interest rates by mortgage or payday lenders," the White House said in the appointment announcement. "Bottom line: he'll strengthen oversight and accountability in order to protect millions of families across the nation." The upcoming hearing will be Cordray's first as CFPB director, and it should be tense. During the subcommittee's hearing in May, an exchange between McHenry and CFPB architect Elizabeth Warren escalated into a shouting match over a scheduling conflict. With a director, the bureau is set to become the de facto regulator of the entire mortgage industry from origination through servicing. It is at work developing new borrower-friendly mortgage documentation and on Wednesday released its examination procedures of both bank and nonbank mortgage lenders. Plenty of new rulemaking duties await the CFPB, the most anticipated being the qualified mortgage requirements, which could define the market for the foreseeable future. Write to Jon Prior. Follow him on Twitter @JonAPrior.