Richard Cordray to resign as CFPB director
Inside Subprime: November 16, 2017
By Alex Huntsberger
Director of the Consumer Financial Protection Bureau (CFPB) Richard Cordray announced yesterday that he will be resigning by the end of November. Cordray’s five-year term was set to expire in July, 2018, and amidst a great deal of hostility to the agency’s mission from the Trump administration, Cordray’s departure means that the future of the CFPB is now even cloudier.
Cordray’s reasons for stepping down are unknown at this time, but it is widely expected that he will be launching a campaign for governor in his home state of Ohio. If he does indeed run, his campaign may center around his strong record of sticking up for consumers and holding powerful corporations accountable as CFPB director.
The CFPB was created as a part of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act and Cordray, a Democrat, was the first person to lead the agency. Under his leadership, the agency took regulatory action against a number of lenders, loan servicers, and debt collectors. So far, they have provided almost 12 million dollars in financial relief to 29 million consumers.
Recently, the CFPB announced a new rule that would require payday and title lenders to run a “full payment test” and assess their customers’ ability to repay their loans. The rule also imposed limits on loan rollover and on lenders’ attempts to debit their customers’ bank accounts. The rule was hailed by something – including the folks at this very blog – as a win for socially responsible lending.
But not everyone saw it that way.
Both Cordray and CFPB have attracted their fair share of controversy. Members of the Republican party have been hostile towards the agency’s mission and its actions against members of the financial industry. And they have criticized the position of CFPB director as being too powerful and free from congressional oversight.
With the Trump administration overseeing a government-wide rollback of Obama-era regulations, the CFPB was one of the few places where the administration could not enact any changes. Or at least they couldn’t so long as Cordray was director.
Now the Cordray has resigned, President Trump will be able to appoint the next CFPB director – one who will likely take a much lighter-handed approach to regulation. Another lawsuit like the one that the CFPB is currently pursuing against student loan giant Navient is unlikely.
While nobody knows what the future holds, consumers will likely miss Cordray, while predatory lenders, loan servicers, and debt collectors will breathe a sigh of relief that he’s gone.
Check out the latest CFPB news from Inside Subprime:
- CFPB finds increase in long-term auto loans
- Senate overturns the CFPB’s anti-arbitration rule
- New CFPB report finds student loan servicers at fault
- CFPB payday lending rules a good start for reform in Utah