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CFPB Head Discusses Dodd-Frank

Richard Cordray

The Consumer Financial Protection Bureau recognizes the burden of regulatory compliance placed on today’s financial organizations and is actively working to alleviate that weight, CFPB Director Richard Cordray conveyed during remarks at the Chamber of Commerce 11th Annual Capital Markets Summit in Washington, D.C., on Thursday.

In his speech, Cordray touched on Dodd-Frank, the Bureau’s role in the financial marketplace, and its efforts to improve and adapt regulations based on industry comment and need.

“Despite our best efforts, we recognize that the outcome of any human process will be imperfect,” Cordray said. “We learn from the comments we receive and our final rules are helpfully informed by that input on a consistent basis. But even after we issue a final rule, if the data shows over time that any of our substantive calls need to be reconsidered, we can and will face the issue frankly and address it. We will not let pride of authorship interfere with the serious task of policymaking in the interests of consumers and the American public.”

It's this approach, Cordray said, that the CFPB took in issuing its first rule regarding Dodd-Frank, which it accepted comment on and then, subsequently, revised the rule based on that feedback.

“We have also taken and continue to take the same approach to our mortgage rules,” Cordray said. “Through rulemaking, we showed our willingness to repeal and replace provisions that were not working as expected, such as the definition of ‘rural and underserved,’ which we expanded not once but twice. We made these adjustments with one aim in mind: to ensure the effectiveness of our rules by making compliance easier.”

According to Cordray, providing clarity in situations like this “reduces burden, increased competition, and produces a better market for consumers."

As mandated by Congress, the CFPB must review any significant rules made after five years have passed. The Bureau will start by reviewing its Dodd-Frank rule on remittances, followed by the mortgage rules.

“This process will tell us more about the effectiveness of the rules and yield other insights,” Cordray said. “One thing we have learned is that whenever you try to ‘improve’ things, you create new transitional challenges as industry finds itself facing a moving target for compliance management. So we will try to be sensitive to the need for further changes.”

Addressing ambiguities and conflicts in other laws is on the agenda too, since many federal consumer financial laws were created in the ‘60s and ‘70s, Cordray said,

“Since that time, not only has technology drastically changed many industries, but certain market practices have evolved as well,” he said. “So often we find that there is substantial demand for clarity and modernization from both industry and consumer advocates alike.”

Ultimately, Cordray said, the goal is to streamline and provide ease of use to the financial services industry.

“These methods can help us achieve what I believe is a shared vision: a highly competitive economy that works for Americans in both the short run and the long run.”

Cordray also mentioned that the Bureau is currently looking at payday loans and the debt collection market as part of its efforts to protect consumers.

About Author: Aly J. Yale

Aly J. Yale is a freelance writer and editor based in Fort Worth, Texas. She has worked for various newspapers, magazines, and publications across the nation, including The Dallas Morning News and Addison Magazine. She has also worked with both the Five Star Institute and REO Red Book, as well as various other mortgage industry clients on content strategy, blogging, marketing, and more.

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