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Posts Tagged ‘director richard’

Chairman Hensarling at Hearing on CFPB

September 13th, 2013 Comments off

the-committee-on-financial-service.pngHouse Financial Services Committee Chairman Jeb Hensarling (R-TX) delivered the following opening statement at the full committee hearing on the Consumer Financial Protection Bureau’s (CFPB) semi-annual report with Director Richard Cordray.

“This morning we welcome Director Richard Cordray, Director of the CFPB, to deliver the bureau’s latest semi-annual report. Mr. Cordray, we recognize that the bureau’s latest semi-annual report may be a little bit dated due to the legal controversy that previously surrounded your appointment and thus delayed your timely appearance. Nonetheless we welcome you today and congratulate you on your recent Senate confirmation.

“As all of us know, the CFPB was designed to operate outside the usual system of checks and balances that applies to almost every other government agency.

“Number one, the CFPB is effectively unaccountable to Congress. It is exempted from the Congressional budgetary and appropriations process. Unlike many other agencies, there is thus no check to ensure the CFPB director is spending the people’s money effectively to promote consumer protection, much less effectively in a time of runaway debt and deficits. Not even the agency from which the CFPB obtains its funding, the Federal Reserve, has oversight over the CFPB director’s spending.

“The CFPB is unaccountable to the executive branch. The director, once appointed and confirmed, can only be removed by the president for cause. Neither can the nation’s chief executive enforce spending discipline on the Bureau because it is not subject to the Office of Management and Budget. Nor does CFPB have their own Inspector General.

“I also find it fascinating, as Syria has dominated our national consciousness, that it merely takes a majority vote of Congress to launch military action or to go to war, but it takes a super-majority vote of the Executive Branch Financial Stability Oversight Council to overturn a ruling of the CFPB, and then only if that ruling can be shown to threaten the safety and soundness of the entire U.S. financial system.

“Next, the CFPB is also uniquely unaccountable to the courts. Section 1022 of the Dodd-Frank Act provides that where the Bureau disagrees with any other agency about the meaning of a provision of a Federal consumer financial law, a reviewing court must give deference to the Bureau’s view under the Chevron Doctrine.

“Finally, in many respects, the CFPB is uniquely unaccountable even to itself since there is fundamentally no ‘it,’ no ‘they’ – only a he. There is no commission, only one omnipotent director, fundamentally accountable to no one.

“Combined with this breathtaking lack of accountability is a grant of power under Dodd-Frank to the CFPB Director that is unilateral, unbridled and unparalleled. The director can unilaterally declare virtually any financial product or service as ‘unfair,’ or ‘abusive,’ at which point Americans will be denied that product or service even if they need it, understand it and want it. Be he our credit czar, national nanny or benevolent financial product dictator, Mr. Richard Cordray is now empowered fundamentally to decide what types of credit cards Americans are allowed to have, what types of mortgages they may have, whether or not they can access a pay day lender.

“All of this does beg the question: who will protect consumers from the Consumer Financial Protection Bureau?

“True consumer protection requires access to competitive, transparent and innovative markets vigorously policed for force, fraud and deception. True consumer protection empowers consumers and respects their economic freedoms to make informed choices free from government interference and fiat.

“Consumer protection is not a zero-sum game – where for consumers to win producers must lose, or where borrowers can only win when lenders lose. Consumer Protection is not, having powerful government agencies ‘nudge’ consumers to make ‘correct’ choices in the belief they are incapable of making rational decisions for themselves.

“When it comes to true consumer protection, and when it comes to the Consumer Financial Protection Bureau, this committee will do everything we can to demand the highest levels of accountability, transparency and answers.”

Congressman Criticizes Cordray

September 10th, 2013 Comments off

Rep. Patrick McHenry, (R-N.C.) rapped Consumer Financial Protection Bureau (CFPB) Director Richard Cordray for suggesting credit unions make mortgages to borrowers they see as a reasonable credit risk even though they fall outside the guidelines of the qualified mortgage (QM) rule. Rep. McHenry says that is opening the door for potential litigation against lenders. As nationalmortgagenews tells MHProNews, the QM rule, which is scheduled to take effect in Jan., 2014, protects lenders from litigation in cases of default, and also protects Fannie Mae, Freddie Mac and FHA loans. But McHenry, as Chairman of the House Financial Services Subcommittee on Oversight says: “If you truly desire that creditors venture outside the walls of the QM rule, I strongly recommend the CFPB work to remove the repercussions of legal action, rather than simply urge lenders to try their luck.”

(Image credit: texaslendingtoday)

American Banker Interviews Richard Cordray

August 20th, 2013 Comments off

While bankers fear the Consumer Financial Protection Bureau (CFPB) under Director Richard Cordray may be too aggressive, he assures them he is balancing safety and soundness with consumer protection. In a wide-ranging interview with American Banker, he says despite the fight over his initial recess appointment, he and his staff prioritized their mission: Protect and empower consumers in a financial marketplace. He says the Bureau recently received its 200,000 complaint, a statistic he says indicates the protection is being effective, as MHProNews has learned. Responding to a question regarding the biggest challenges of the agency, he referred to the four D’s: Deceptive and misleading marketing of products; debt traps like payday loans and deposit-advance products that can garner up to 390% interest; discrimination—treat all consumers the same; and dead ends, like debt collection, loan servicing, and possibly student-loan servicing and other instances in which the consumer is between two institutions. For the complete interview, please click here.

(Image credit: Consumer Financial Protection Bureau)

CFPB Sues Lender for Violating Compensation Rule

July 25th, 2013 Comments off

A mortgage lender is being sued by the Consumer Financial Protection Bureau (CFPB) for allegedly paying bonuses to loan originators that charged consumers higher interest rates in violation of the loan officer compensation rule. The 85th largest lender in the country, Castle and Cooke Mortgage LLC of Salt Lake City is said to have paid 150 loan officers quarterly bonuses ranging from $6,100 to $8,700 for leading borrowers into higher-priced loans. The Bureau

 

says loan officers who did not charge higher rates did not receive bonuses, and that 1,100 of the loans were illegal. According to what MHProNews has learned from nationalmortgagenews, C&C originated $332 million in loans in the first quarter. The lawsuit seeks restitution and civil penalties, and specifically cites company president Matthew Pineda and senior vice president Buck Hawkins. “We are taking action against the type of practices that precipitated the financial crisis,” said CFPB director Richard Cordray.

(Photo credit: top, ABCNews; bottom, HousingWire)

Consumer Sentiment Rising

June 28th, 2013 Comments off

A survey released today (June 28) indicated consumer sentiment among higher-income families nearly rose to its highest level in six years, hitting 84.1 in late June, 2013, just below the 84.5 six year high in May. Economists surveyed by Reuters had forecast 82.8 for June, as MHProNews has been informed by rvbusiness. Since consumer spending accounts for 70 percent of the national economy, some analysts base their judgments on the optimism (or not) of consumers about the economy. Survey director Richard Curtin says, “Consumers believe the (economic) recovery has achieved an upward momentum that will not be easily reversed.” Consumer spending in the first quarter grew at an annualized rate of 2.6 percent, faster than the 1.8 percent in Q4 2012, but below the government prediction of 3.4 percent growth.

(Image credit: photobucket)

CFPB Director takes Questions

June 25th, 2013 Comments off

Consumer Financial Protection Bureau Director Richard Cordray, in a speech followed by a Q and A before the Exchequer Club, said more commotion than necessary is being made about the qualified mortgage (QM) rule. He says lenders will continue lending as they have in the past, even outside the rule, according to nationalmortgagenews. For a lender “to not make those mortgages and leave that money on the table and leave people un-served because of some vague fear that they can’t quite articulate; that doesn’t sound to me like the kind of good decision-making that lenders have made for years,” said Cordray. He agrees with the chief economist at Moody’s Analytics, Mark Zandi, who says $20 billion of the $1.25 trillion mortgage market will fall outside the QM rule, which amounts to two percent of the total. Noting the agency is trying to be flexible in its overall approach, when questioned about the extensive mortgage data the CFPB is currently gathering, Cordray said the information collected will help a future director make more solid policy decisions. Speaking of his own battle with Republicans over his confirmation, as MHProNews has learned, he does not profess to know what was in the mind of the Dodd-Frank Act congressional creators, but feels the structure allows the ability to reshape policy as needed.

(Photo credit: ABCNews–CFPB Director Richard Cordray)

CFPB Issues Exam Procedures

June 5th, 2013 Comments off

According to mortgagenewsdaily, the Consumer Financial Protection Bureau (CFPB) has issued updates regarding what examiners will be checking lenders for when the new regulations go into effect Jan. 2014. Noting these are the first of what is anticipated will be numerous updates, the examination procedures concern the Truth in Lending Act (TILA) and the Equal Credit Opportunity Act (ECOA). “The CFPB recognizes that the easier we make it for financial institutions and mortgage companies to follow the new regulations, the better off consumers will be,” says CFPB Director Richard Cordray. “By releasing details of what our examiners will be looking for well in advance of the effective date of most of the rules, we are giving industry more time to adjust.” As MHProNews understands, the updates deal with compensation, appraisals, escrow accounts and qualifications for loan originators. The CFPB is coordinating its efforts with other federal government regulators that oversee financial institutions and mortgage companies to ensure there is a shared understanding of the rules.

(Image credit: HousingWire)

Credit Unions to Reduce Lending

May 20th, 2013 Comments off

The nationalmortgagenews reports in a survey of credit unions responding to the QM Rule issued by the Consumer Financial Protection Bureau (CFPB), 44 percent say they will no longer originate non-qualified mortgages and another 44 percent will reduce originations. In the survey conducted by the National Association of Federal Credit Unions (NAFCU) and CU Monitor Survey, 51.2 percent say they have begun adhering to the new rules in anticipation of the Jan. 2014 implementation date; 37.5 percent originated loans in 2012 that would not meet the QM criteria. The 76.2 percent of respondents that service mortgages expect the CFPB’s mortgage servicing requirements to run around $10k in initial costs and ongoing expenses, while 11.5 percent expect initial setup above $50k. Of the 23.3 percent who applied for a waiver 89 percent were granted, but 41.7 percent say the process was difficult. As MHProNews reported here May 16, in a speech to the National Association of Realtors (NAR), CFPB Director Richard Cordray said credit unions have a tradition of making good loans that may not qualify under the QM Rule, and they should continue doing so with borrowers that present a reasonable risk.

(Image credit: hansfax)

Cordray: QM Rule Should not Always Apply

May 16th, 2013 Comments off

Responding to what are perceived as carved-in-stone strictures, Consumer Financial Protection Bureau (CFPB) director Richard Cordray says regardless of the agency’s QM Rule with its highly-defined rules, lenders should feel safe originating loans that have exhibited strong performance over time, as nationalmortgagenews tells MHProNews. Noting community banks and credit unions have long made good loans, in a speech to the National Association of Realtors (NAR) he says, “Nothing about their traditional lending model has changed, and they should continue to offer such mortgages to borrowers whom they evaluate as posing reasonable credit risk—whether or not they meet the criteria to be classified as qualified mortgages.”

(image credit: andyenstallblog)

 

Testimony from Director Cordray not Acceptable

April 24th, 2013 Comments off

The Manufactured Housing Association for Regulatory Reform (MHARR) informs MHProNews Jeb Hensarling, (R-TX) Chairman of the House Financial Services Committee, says he cannot accept testimony from the Consumer Financial Protection Bureau’s (CFPB) director Richard Cordray on the semi-annual report since he is not a valid director. A federal appeals court has ruled that President Obama’s recess appointment of Cordray is constitutionally invalid. He says until there is a valid director, “The committee intends to continue to conduct rigorous oversight of the CFPB’s activities, and will expect the CFPB’s cooperation in those efforts, including making other employees available to testify at committee hearings and responding fully to committee requests for documents and information.” Commenting on members of Congress who want to make the bureau accountable for its budget, staff and activities, he says, “No other regulator has more influence over the daily financial lives of Americans. Dodd-Frank gives the CFPB director the power to decide what financial products and services will – and will not – be available to American consumers and how much they will have to pay for them.” Chairman Hensarling states the bureau should be run by a bipartisan commission, and notes President Obama, Dodd-Frank authors former Rep. Barney Frank and former Sen. Chris Dodd, and Sen. Elizabeth Warren, credited with the idea of the CFPB, all originally wanted a commission to run the CFPB.

(Photo credit: Wikipedia–Rep. Jeb Hensarling)