Consumer bureau chief defends agency amid GOP threat

Consumer bureau chief defends agency amid GOP threat
© Greg Nash

Consumer Financial Protection Bureau Director Richard Cordray on Wednesday criticized Republican efforts to limit the agency’s scope and power.

Cordray defended the CFPB’s history of enforcement actions against banks and financial services firms as the House prepares to vote next week on a bill to strip much of that power away.

“It is abusive to take unreasonable advantage of people’s lack of understanding or inability to protect themselves,” Cordray said at an event in Arlington, Va., according to Bloomberg BNA.

“We are speaking to every institution in that market by setting the expectations they must meet in their own compliance work to avoid similar violations, right away and without excuses.”

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Cordray’s comments come a week before the House is scheduled to vote on the CHOICE Act, a GOP rewrite of the Dodd-Frank Act. The Republican bill would drastically limit CFPB’s power, revoking its authority to punish “unfair, abusive and deceptive practices” — and it is expected to pass along party lines.

Cordray and Democratic lawmakers say the agency has used that authority to protect vulnerable consumers from predatory financial services firms. CFPB’s defenders often point to the more than $11 billion in restitution for customers taken by the agency from allegedly abusive lenders and banks.

But Republicans say the CFPB is using an ambiguous standard to punish companies, regulating the market through enforcement instead of issuing rules.

Revoking CFPB’s authority to crackdown on abuse is one of several measures in the CHOICE Act meant to reign in the agency, which the GOP has long called unaccountable, abusive and redundant.

The bill renames the CFPB the Consumer Law Enforcement Agency and reduces its power to enforce pre-existing consumer protection laws. Its sole director would be removable at will by the president, and its budget would be controlled by Congress through the traditional appropriations process.