Revolving door in full swing at new consumer bureau
At least nine senior officials at the Consumer Financial Protection Bureau have left to join the private sector since the beginning of the year.
The exodus began in January, when the regulator’s deputy director, Raj Date, announced his resignation, with more than 12 employees departing overall.
Date helped set up the new bureau, a product of the Dodd-Frank financial reform law, but left to begin his own bank consulting firm, which launched in April.
Several CFPB staffers, including its chief of staff, Garry Reeder; Chris Haspel, the senior adviser for mortgage servicing; Mitchell Hochberg, its senior regulatory counsel and a researcher from the bureau’s Card Markets team, joined Date at his new firm, Fenway Summer.
Meanwhile, three key policy advisers and regulators from the agency — Bart Shapiro, Len Kennedy and Benjamin Olson — went to telecommunications, law and lobby firms in the D.C. area.
Former CFPB employees told American Banker they worried about the high rate of turnover. The regulator had a 9 percent attrition rate for fiscal 2012, the magazine found.
The agency employs about 1,200 people, American Banker found, with 300 of those jobs added since October.
Being a new agency, CFPB says the attrition rates are derived from an ever-rising number of staff. It remains consistent with CFPB’s expectations, the agency said.
“The CFPB has attracted, and continues to attract, talented staff from diverse backgrounds that are committed to our mission and want to work on issues directly impacting American consumers,” agency spokeswoman Moira Vahey said in a statement.
With the CFPB creating a slew of consumer protection regulations, former staffers at the agency can be valuable hires for consulting firms and lobby shops looking to keep up with the new rules.
Olsen, who left most recently, worked as the deputy assistant director for the CFPB’s Office of Regulations and helped the bureau draft key new mortgage rule proposals mandated by Dodd-Frank, including the hotly contested qualified mortgage (QM) and mortgage servicing rules.
Late last month, he became a counsel in BuckleySandler’s Washington office.
“Ben’s direct experience as a senior lawyer at both the Federal Reserve Board and the CFPB will be of great assistance as we guide our clients through the challenges ahead in this time of heightened regulatory scrutiny,” said the firm’s chairman and executive partner, Andrew L. Sandler, in a statement.
Ronald Rubin departed the bureau last year, before the recent bout of resignations began. He served as an enforcement attorney at the bureau since its early days and became a partner at Hunton & Williams’ Washington office in September. The firm represents many financial and corporate clients.
“With the CFPB expected to bring a wave of enforcement actions on behalf of consumers in the areas of residential mortgages, auto loans, credit cards, payday and title lending, debt collection, and student loans, it is going to be a significant advantage to our clients to have Ron’s agency insights and experience,” said Tyler P. Brown, the head of the firm’s bankruptcy, restructuring and creditors’ rights practice group, in a statement.
Not all of the bureau alumni, however, went to specialize in consumer finance in the private sector.
Nick Rathod and Megan Lewis left the regulator in recent months to join Mayors Against Illegal Guns, New York City Mayor Michael Bloomberg’s group advocating for stricter gun laws.
Kennedy, a longtime staffer at the bureau who most recently worked as a senior adviser to CFPB Director Richard Cordray, went back to his roots in technology.
In May, Kennedy became the senior vice president at telecommunications corporation Neustar, which provides clearinghouse and directory services to communications and Internet companies. Before joining the consumer bureau, he worked as the vice president of Nextel, and oversaw its merger with Sprint before becoming the corporation’s chief lobbyist.
— This story was updated at 6:11 p.m.