Published: Thu, November 16, 2017
Economy | By Melissa Porter

Cordray sets exit from CFPB

Cordray sets exit from CFPB

Richard Cordray, the current Director of the Consumer Financial Protection Bureau, has announced his resignation from the agency which he led since its inception in 2011.

"Cordray's resignation letter ran through a list of the agency's accomplishments, including "$12 billion in relief recovered for almost 30 million consumers; stronger safeguards against irresponsible mortgage practices that caused the financial crisis and hurt millions of Americans; giving people a voice by handling over 1.3 million complaints that led to problems getting fixed for vast numbers of individuals, and creating new ways to bring financial education to the public so that people can take more control over their economic lives".

The CFPB and Cordray have come under fire from the GOP for the Bureau's regulatory work and supposed lack of oversight.

Cordray, 58, told staff of his departure in a note on Wednesday. He did not specify in the memo what he plans to do next. Instead, Cordray has chosen to resign - conceivably for political reasons, as he previously served as Ohio's Attorney General, and could potentially be eyeing a Gubernatorial run in his home state. None of this could have happened without all of us being dedicated to pull together in supporting and protecting people and making every consumer count.

In a letter to his colleagues at the Consumer Financial Protection Bureau, Cordray wrote that he would leave by the end of the month.

Shortly after his election, Trump took steps toward rolling back Dodd-Frank, directing Treasury Secretary Steven Mnuchin to review the agency's authority over financial institutions. Cordray appealed to Trump directly not to sign the legislation, but was rebuffed. In contrast, Democrats heaped praise on Mr. Cordray for making the young watchdog an aggressive regulator, saying he's helped recover nearly $12 billion for consumers.

"Now that Director Richard Cordray has resigned, a new Trump-appointed Director will focus on deregulation and loosening compliance requirements", Bloomberg Intelligence analysts Nathan Dean and Elliott Stein said in a note Wednesday.

The squabbling isn't new. The agency was one of the central achievements of the Obama administration following the 2008 financial crisis. The provision made it easier for consumers to team up to sue banks and credit card companies.

In October, the CFPB finaliazed rules that would severely restrict the short-term and payday loan industries. Republican lawmakers overturned the CFPB's arbitration rule last month.

The most high-profile case Cordray led was a $185 million fine of Wells Fargo & Co. for the bank's fake checking accounts scandal in 2016.

Massachusetts Sen. Elizabeth Warren, the Democrat who is credited with conceiving and setting up the CFPB, has said its actions were necessary to protect ordinary Americans in the wake of the worst economic downturn since the Great Depression.

"The CFPB will face substantive changes in the years ahead as policymakers recalibrate the regulatory environment", said Isaac Boltansky of Compass Point Research & Trading. He could not simultaneously hold his position as director of the CFPB and announce his candidacy before the February 2018 deadline. Mr. Cordray's entrance into the race would likely cause at least some competitors to withdraw because he is the most popular among party activists, said John Green, a political science professor at the University of Akron.

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