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Renewed Calls for CFPB’s Cordray to Step Down

April 6th, 2017 Comments off
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President Barack Obama announces the nomination of Richard Cordray as the first director of the CFPB on July 18, 2011. Credit: Wikipedia.

In the manufactured housing industry, the Consumer Financial Protection Bureau (CFPB), and it’s director, Richard Cordray, have made growth difficult.

And now, Washington lawmakers have taken notice of the challenges.

According to CNN Money, Rep. Jeb Hensarling (R-TX), chairman of the House Financial Services Committee, has called on President Trump to fire Richard Cordray, the head of the Consumer Financial Protection Bureau, immediately.

I believe the President is clearly justified in dismissing you and I call upon the president — yet again – to do just that, and to do it immediately,” said Hensarling, during a hearing on Capitol Hill yesterday.

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Jeb Hensarling. Credit: House.gov

The organization has been in the crosshairs of President Trump and Republicans, who have proposed Death Blows to the organization via legislation.

Speaking on the pair of bills (S. 30 and H.R. 1031) put forward last month to advance Republicans’ broader Dodd-Frank reform efforts by tackling Title X of the law, Texas Senator Ted Cruz was clear on the problem.

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Sen. Ted Cruz. Credit: Washington Examiner.

This legislation would give Congress the opportunity to free consumers and small businesses from the CFPB’s regulatory blockades and financial activism, which stunt economic growth,” said Cruz.

One of the challenges around removing Cordray comes from the Dodd-Frank act, which created the agency. Dodd-Frank says, to a certain degree, that the President cannot fire the director without cause.

And for some Democrats, they see the agency being independent as critical.

Republicans have been clamoring to weaken, impede, and ultimately destroy the Consumer Bureau since its creation,” said Rep. Maxine Waters (D-CA).

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Representative Maxine Waters. Credit: Wikipedia

But the agency was dealt a blow recently, when a federal appeals court denied their motions in a case with PHH Mortgage.

The same three-judge panel of the U.S. Court of Appeals for the D.C. Circuit that determined the CFPB structure was unconstitutional in October 2016, denied appeals in the PHH Corp. vs. Consumer Financial Protection Bureau case.

In the decision, which was covered by the Daily Business News here, the court determined the CFPB is controlled by a “single, unaccountable, unchecked directorRichard Cordray, who can only be removed for just-cause, which poses the risk of arbitrary decision-making and abuse of power compared to a multimember independent agency.“

The case is headed for another hearing on May 24th.

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Credits: Flickr, CFPB, PHH.

During what was, at times, a contentious hearing, Republican lawmakers put pressure on Cordray and the CFPB, for what they see as a less than effective agency.

The CFPB was a latecomer in uncovering Wells Fargo’s fraudulent sales practices,” said Rep. Ann Wagner (R-MO).

Can you specify about when you prompted your staff to begin its investigation of Wells Fargo?”

Wagner also suggested that the CFPB was “asleep at the wheel” until press reports emerged on the scandal, which the Daily Business News covered here.

Lawmakers also press Cordray for his failure to reply to dozens of subpoena requests, including one tied to Ally Financial (ALLY) for discriminatory pricing in the lender’s auto loans, and for not certifying compliance with lawmakers’ requests.

I believe we have complied with all your subpoena requests,” Cordray told the committee.

Hensarling also pressed Cordray for answers on whether he was aware of the Federal Reserve’s Inspector General review of the agency’s handling of Congressional inquiries.

I don’t always know the inquiries that the IG is conducting,” said Cordray. “I’m not supposed to know all the inquiries that IG is conducting.

 

Impact for the Manufactured Housing Industry

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Credit: Wikipedia, CFPB, HubPages.

While the CFPB had the support of the Obama Administration, the Trump Administration has had the organization in its crosshairs since the election.

Those in the industry have not been shy about their feelings on the matter.

The information on this case also has indirect ramifications for the Manufactured Housing Institute (MHI), and others in the industry, as the Preserving Access bill is being floated, which would modify portions of Dodd-Frank.

For more on what the Preserving Access bill means for the industry, check out the latest article on The Masthead.

For more on the CFPB’s impact on the manufactured housing industry, click here. ##

 

(Image credits are as shown above.)

 

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RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.