Through President Obama’s appointment today of Richard Cordray to serve as Consumer Financial Protection Bureau director, the bureau is officially free to wield its full power, including the regulation of non-banks and mortgage lenders.
New new director, in a statement following his appointment, noted the importance of regulating all institutions, bank and non-bank.
“I am pleased to say that we will now be able to exercise the full authorities granted to us under the law and begin to supervise these nonbanks,” Cordray said. “Standing up this program is a top priority for the CFPB. Over the coming weeks we’ll be announcing more information about this program and how it will help to improve the consumer financial markets.”
The appointment is likely to spark more opposition from Republican groups as well as those who have long advocated for a commission-based leadership structure.
“The controversial nature of today’s recess appointment reinforces the banking industry’s concerns about the Bureau’s structure and lack of accountability,” said American Bankers Association President and CEO Frank Keating in a statement. “It puts the Bureau’s future actions in constitutional jeopardy, threatening its work, complicating compliance efforts of banks and further undermining the entity’s authority and credibility.”
Cordray further touted the ability of the CFPB to finally use its full power, which starts now.
“Now, with a Director, the CFPB can exercise its full authorities—with respect to both banks and nonbanks—to help those markets operate fairly, transparently, and competitively,” Cordray said.
The bureau is currently supervising large banking institutions, but says plans for supervising nonbanks are forthcoming. Additional implications for the bureau’s authority over reverse mortgage lending include a study of the industry the CFPB will conduct in 2012. The bureau is also in the process of testing new mortgage disclosures and has established an Office of Older Americans to protect American seniors.
Written by Elizabeth Ecker