Business should 'embrace' consumer protection agency, new chief says

Consumer Financial Protection Bureau (CFPB) Director Richard Cordray has a simple message for the business community: get on board.

Cordray, who was installed at the top of the new agency a little over a week ago after a controversial recess appointment, told reporters Thursday that the business community has nothing to fear — provided they play by the rules.

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His comments came as the president of the U.S. Chamber of Commerce, just a few blocks away, was blasting the agency as lacking oversight. Tom Donohue added in his annual address on the state of American business that he was "deeply disappointed" to see Cordray installed via a contentious recess appointment, and did not rule out suing to challenge the move.

But Cordray argued that the interests of legitimate business and the bureau are one and the same, and they should be able to coexist.

"This bureau should be embraced by the Chamber," he said at the bureau's downtown temporary headquarters. "They should welcome us and we should be good for them."

He added that he and Donohue spoke the day before and remain in "frequent communication."

Cordray argued that a major part of the CFPB's mission will be on cracking down on rogue financial players that peddle risky, opaque and harmful financial products to consumers. The "vast majority" of the chamber's members play by the rules, Cordray said, so they should have nothing to fear from the new agency.

In fact, Cordray argued that the bureau's existence should be a boon for legitimate business, as previously unregulated nonbank financial institutions, such as payday lenders, will finally have to answer to someone in the government.

"That's the worst form of unfair competition," he said. "The laws didn't really apply to them."

The CFPB has had to fend off critics since its inception as part of the Dodd-Frank financial reform law. Republicans and business interests warn the new agency could end up pushing onerous rules onto the business community, burying them in new regulations and examinations.

But while the agency is charged with first and foremost protecting consumers, the former Ohio attorney general sought to paint himself as no stranger to the world of business, highlighting that he is a longtime member of his local Chamber of Commerce back home, and even represented it at times as a private attorney.

"I understand, in many ways, their perspective," he said. "I know that it's not easy to run a business and be successful."

As businesses continue to dig out from the financial crisis driven in large part by a glut of subprime mortgages, Cordray said the CFPB's mission to clarify the terms of financial products for consumers should be in the best interest of everyone looking for a fair shake.

"I happen to believe that if the bureau existed 10 years ago ... things would have been very different," he said. "Maybe the crisis would have been averted."

The CFPB also finds itself in the middle of a political maelstrom, as Republicans are crying foul on Cordray's appointment, saying pro forma sessions initiated by the GOP actually prevented the Senate from going into recess — making the president's move illegitimate.

Cordray said that following the appointment, he has spoken with leaders in both parties and both chambers over the phone, and plans to keep an open dialogue with Capitol Hill. But he has tried thus far to stay above the partisan fray, emphasizing his focus on the task at hand and not the controversy surrounding it.

"We are going to walk one step at a time straight ahead and do our work," he said. "I'm not concerned about anything else."