Dems, Cordray Defend CFPB and Nonbank Oversight on Capitol Hill

Consumer Financial Protection Bureau Director Richard Cordray appeared today before members of the House Committee on Oversight and Government Reform, where he fielded questions from members of the House on his role, the bureau’s role and his controversial recess appointment.

The discourse presented during the hearing provided a stark contrast to a fiery exchange between Cordray’s predecessor, Elizabeth Warren and Rep. Patrick McHenry (R-N.C.) last year upon the bureau’s launch—an example which many speculated the hearing today could follow.

Not, so, however.

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In responding to some of the “many questions that do remain,” according to Rep. McHenry, Cordray noted the magnitude of the industries the CFPB oversees.

“We need to the scope of what we’re trying to deal with,” Cordray said, noting a $20 trillion set of markets including mortgage lending. “It’s an important set of markets and we hope we are up to the task, but it’s an immense challenge.”

Committee members questioned Cordray about his appointment, made during a senate “recess” earlier this month. Regardless of the appointment means, Cordray said, he viewed the job as a job.

“I understand there is controversy. …all I can do is carry out my responsibilities and do it in a way with transparency and accountability,” he said.

Including nonbank lending oversight including all mortgage companies, Cordray said the CFPB staff would total around 1200 to 1500 people. Currently, according to CFPB reports, the bureau totals roughly 750 employees.

Written by Elizabeth Ecker

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  • The CFPB perpetuates the regulatory double standard between federally chartered banks and non banks while adding another layer of fear to an already paranoid industry.

    Rational will not return to underwriting until the loan buyback issue is addressed. Even the Fed has chimed in on this:

     Fed Gov. Elizabeth Duke recently said the GSEs’ loan buyback     policies are contributing to the “extraordinarily tight credit standards that currently prevail” in the market. She noted that lenders are hesitant to offer mortgages to borrowers in the lower range of GSE purchase parameters, fearing defaults and repurchases.

    Many lenders will add additional underwriting overlays in response to the oversight of Non-Banks by the CFPB. The unintended consequences are the large federally chartered banks will continue to gain market share at the expense of the non banks. Wasn’t the original intent of the regulators to prevent TO BIG TO FAIL?  
     

  • The President made Mr. Cordray look like a puppet last night — smile real big for everyone.  It was political theater at its best.  For all of the good Mr. Cordray did for the CFPB earlier that day, the President spoiled in his state of re-election speech last night.

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