CFPB Director Faces Re-Nomination Hearing

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We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Consumers Union on Wednesday, March 13th, 2013

Yesterday’s hearing by the Senate Banking Committee on the re-nomination of Richard Cordray to head the Consumer Financial Protection Bureau was just the beginning of what could turn out to be a long fight in Congress. Cordray, who was named the director of the CFPB by recess appointment by President Obama in January 2012, appeared before the committee to respond to questions about his performance and the structure of the agency itself.

Senator Elizabeth Warren of Massachusetts, a new member of the Banking Committee, defended Cordray and the CFPB, stating that “I think the delay in getting him confirmed is bad for consumers, it’s bad for small banks, it’s bad for credit unions, it’s bad for anyone trying to offer an honest product in an honest market.”

But the tough battle ahead was made clear by Ranking Member of the Banking Committee Senator Mike Crapo of Idaho, who is opposed to any nominee to lead the CFPB unless the financial watchdog is restructured. He argued during the hearing that “the structural changes to the CFPB that we have recommended are essential.”

Senator Crapo, along with Senator Mitch McConnell of Kentucky and 41 other Senators, opposed Cordray’s nomination in a letter sent last month to President Obama, demanding several reforms, including that Cordray be replaced by a board of directors, and that the bureau be reliant on the annual and very political appropriations process in Congress. They promised to obstruct the confirmation of any CFPB director because of their opposition to the bureau’s current structure, a move that Senator Warren noted is unprecedented. CU has opposed these changes to the CFPB because they would limit the CFPB’s capacity to protect consumers.

Next, Cordray faces a vote by the Banking Committee. We expect Cordray to be approved by the Committee, but the real fight will come later, when his nomination is brought before the full Senate. We support Cordray’s nomination, and hope that he is quickly confirmed as director so that he can continue his important work with the CFPB.

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