Speaking before the House Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs for the first time as director of the Consumer Financial Protection Bureau (CFPB), Richard Cordray spoke of his desire to hear from Congress as well as the bureau’s accomplishments to date.
House Republicans had been opposed to Cordray’s appointment, championing instead a board to oversee the new bureau. The new director of the regulator tried to allay their fears by assuring members of the subcommittee that he desired their feedback and hoped to establish a working relationship with them.
“As director, I am committed to establishing the kind of productive working relationship with you and your colleagues that will allow this agency to succeed,” he said. “As we work to fulfill the statutory mission set out by Congress, we believe it is critical that Congress receives the information it needs about our activities.
“Moreover, we need and want to hear from you,” Cordray continued. “At every stage, I believe that input from Congress will help improve our work and our ability to deliver real value to American consumers. I look forward to an open dialogue with Congress on the many important issues that affect your constituents and consumer financial markets nationwide.”
He went on to discuss the accomplishments of the bureau thus far, beginning with its Know Before You Owe campaigns to help consumers understand the information provided to consumers regarding residential mortgages, student loans and credit cards.
“On mortgages, in particular, as part of our required tasks under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB is creating shorter and more useful disclosure forms for the loan estimate that consumers receive shortly after they apply for a mortgage,” Cordray said. “Our work in this area will reduce regulatory burden and make the costs and risks of a loan clearer so that consumers can choose the mortgage that best meets their needs. Specifically, the CFPB is working to integrate the separate disclosures required under the Truth in Lending Act (TILA) and RESPA. Over five rounds of testing prototype forms the CFPB received feedback on the forms from more than 24,000 members of the public, industry participants and market experts. The CFPB is also working to reduce unnecessary paperwork by combining disclosures received at the closing of a mortgage agreement.”
Cordray also spoke about the Bureau’s initiative to streamline the regulations that the agency inherited from seven different agencies under the Dodd-Frank Act.
“In November 2011, the bureau issued a notice and request for information asking the public to identify provisions of the inherited regulations that the agency should make the highest priority for updating, modifying or eliminating because they are outdated, unduly burdensome or unnecessary,” he said. “In addition, it seeks suggestions for practical measures the bureau could take to make complying with the regulations easier.”
Cordray also noted that now that the bureau has its director, the CFPB has the full authority to investigate and bring enforcement actions to ensure that financial providers are held accountable. He pointed out that the bureau is cooperating closely with other law enforcement agencies “to avoid any duplication of work and to coordinate limited resources.”
After speaking about the bureau’s efforts to engage with consumers, he assured committee members of the CFPB’s commitment to meaningful engagement with industry stakeholders “whose input is essential to understanding consumer finance markets and the implications of consumer bureau actions.
“From the earliest stages of our efforts to stand up the agency, outreach to smaller lenders has been a particular focus of the bureau,” Cordray said. “We recognize that a strong and diversified financial services industry — one that includes small as well as large providers — is the best way to serve American consumers.
“Consumer bureau staff also continue to engage with large bank and nonbank executives as well as trade associations representing financial institutions,” he continued. “Large financial institutions have a broad view of consumer finance markets and their practices and products affect millions of Americans every day. A well-grounded understanding of the nation’s larges financial companies is essential to fulfilling our mission to improve consumer financial markets.”