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Cordray Confirmed as CFPB Director

The banking industry reacts to the news that acting CFPB director Richard Cordray will now head the agency on a permanent basis.

The Senate Tuesday confirmed the appointment of Richard Cordray as the director of the Consumer Financial Protection Bureau, nearly two years after he assumed the post via a controversial recess appointment by President Obama.

The 66-34 vote came after the Senate reached a deal to avert the so-called “nuclear option” from being invoked to break a filibuster threat over the President's top nominees for agency posts.

Cordray will now permanently take up the post he has been filling at an interim level the past two years. During that time, the CFPB has engaged in several initiatives it says are needed to reform the banking industry, including a push to further regulate the mortgage servicing industry and cracking down on overdraft fees.

Within the banking industry, reaction has been wide-ranging to Cordray's appointment.

In a recent interview with Bank Systems & Technology, Financial Services Roundtable CEO Tim Pawlenty said that while his organization has a good working relationship with Cordray, they would like to see reforms in terms of oversight and funding. "We think there should be a board of 3-5 members overseeing the CFPB and their funding," Pawlenty added. "And currently, none of that exists."

Chris Stinebert, president and CEO of the American Financial Services Association said that while Cordray has done an "admirable job building bridges with the industry" questions remained about several CFPB practices "such as the methodology it uses to determine discrimination through disparate impact and the scope and purpose of its vast collection of consumer account information."

Meanwhile, Credit Union National Association President Bill Cheney, in a letter to Cordray, congratulated him on the appointment and noted that the group and credit unions "look forward to continue working with him."

He added, however, "We remain very concerned about the impact that a number of the Consumer Financial Protection Bureau's regulations and proposals will have on credit unions, which were never the focus for the creation of the agency in the first place.

Director Cordray has proven himself to be receptive to credit unions and particularly our concerns about the impact of the actions on our cooperative financial institutions…Nevertheless, we urge the CFPB to utilize its broad exemption authority for credit unions given that 'we didn't cause the problem,' and recommend to Congress that it support broad exemption authority for credit unions."

[See Also: A 21st Century Agency: Q&A With CFPB's Chris Willey]

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

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User Rank: Author
7/17/2013 | 8:12:16 PM
re: Cordray Confirmed as CFPB Director
I think keeping Cordray was a good idea from a continuity standpoint. The CFPB is still a relatively new organization and, as Kathy pointed out, this is just the beginning of a long working relationship that will have to be built between banks and the CFPB. At this early stage it could be damaging to bring in a new director and make changes to the agency when that relationship is starting to develop.
User Rank: Author
7/17/2013 | 6:13:01 PM
re: Cordray Confirmed as CFPB Director
Banks do need to do better financial education, but consumers also bear the responsibility get educated themselves about what financial products they buy.
User Rank: Author
7/17/2013 | 5:15:38 PM
re: Cordray Confirmed as CFPB Director
Hopefully banks won't waste any (more) time hoping the CFPB will go away, and focus instead on improving their policies, services & compliance so that they are consistently and fairly serving (and educating) consumers -- I see this as a great opportunity to improve engagement and also to build relations with untapped customer segments such as unbanked consumers.
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