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Is the CFPB Director’s Future at Risk?

Cordray

Richard Cordray

Some of the many questions brought up in the wake of the election of Donald Trump to the presidency involve the future of the Consumer Finance Protection Bureau and its director, Richard Cordray. An answer to those questions may be coming soon following a report released Wednesday by House GOP staff.

The report, prepared by Republican staffers on the House Financial Services Committee alleges the CFPB likely violated the Administrative Procedure Act when issuing regulations on the auto lending industry.

The violation could endanger Cordray’s job under the Dodd-Frank Act, which stipulates that the director of the CFPB can only be fired for cause.

House Financial Services Committee Chairman Jeb Hensarling (R-Texas) issued a statement Wednesday calling the CFPB “a dangerously out-of-control, unconstitutional and unaccountable bureaucracy,” though he did not go so far as to say Cordray should be fired.

“It is a case study in the overreach and pathologies of the regulatory state run amok,” Hensarling said. “The Bureau routinely abuses and exceeds its authority, robs consumers of their economic freedoms, increases consumer costs and often attempts to hide information from the public.”

Hensarling also did not comment on the Supreme Court’s October 2016 ruling striking down the “for cause” language, giving the president authority to fire the director at will. That case is under appeal.

Democrats on the Senate Banking Committee sent a letter to Cordray on Tuesday praising him and his efforts leading the CFPB, reiterating the need for his leadership going forward under the Trump Administration.

“Under your leadership, the CFPB has worked to protect servicemembers, seniors, students, and working families of all backgrounds from predatory financial schemes and illegal discrimination,” the Senators wrote. “We hope you continue to lead the charge against companies that take advantage of hardworking Americans.”

The Senators noted that polling shows the vast majority of Americans agree that the CFPB is doing great work. Seventy-one percent of Americans—Republicans and Democrats—approve of the CFPB’s mission, and 66 percent of Republicans who voted for President-Elect Trump believe that the CFPB should be left alone to continue its work or even be given expanded authority to do more to protect American families.

Signees included Sen. Sherrod Brown (D-OH), the Banking Committee’s Ranking Member, and Sens. Jack Reed (D-RI), Robert Menendez (D-NJ), Jon Tester (D-MT), Mark R. Warner (D-VA), Elizabeth Warren (D-MA), Joe Donnelly (D-IN), Brian Schatz (D-HI), Chris Van Hollen (D-MD), and Catherine Cortez Masto (D-NV).

The spokesperson for the CFPB did not respond as of the time of writing.

To read the GOP staff’s full report, click here.

About Author: Phil Banker

Phil Banker began his career in journalism after graduating from the University of North Texas. He has covered a number of communities across Texas and southern Oklahoma, writing news and sports for publications including the Ardmoreite, Ennis Daily News and the Plano Star-Courier. He is currently a contributor to DS News and The MReport.
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