Congress grills CFPB director

As much as Cordray tried to used his most recent report to Congress to boast about recent achievements of the bureau in the mortgage industry, Republicans appeared not pleased.

As much as Consumer Financial Protection Bureau (CFPB) Director Richard Cordray tried to used his most recent semi-annual report to Congress to boast about recent achievements of the bureau in the mortgage industry, Republicans appeared not pleased.

In particular, many members of the House Financial Services Committee want the CFPB to have more accountability.

“The CFPB undoubtedly remains the single most powerful and least accountable Federal agency in all of Washington,” ​Chairman Jeb Hensarling (R-Texas) said. “When it comes to the credit cards, auto loans and mortgages of hardworking taxpayers the CFPB has unbridled, discretionary power not only to make those less available and more expensive, but to absolutely take them away."

"Consequently, Americans are losing both their financial independence and the protection of the rule of law. The bureau is fundamentally unaccountable to the president since the director can only be removed for cause. Fundamentally unaccountable to Congress because the bureau’s funding is not subject to appropriations,” he added. “Fundamentally unaccountable to the courts because Dodd-Frank requires courts to grant the CFPB deference regarding its interpretation of Federal consumer financial law. Thus, the bureau regrettably remains unaccountable to the American people.”

In February, a bipartisan duo offered a bill to Congress that would create more oversight of the CFPB. Rep. Steve Stivers (R-Ohio) and Rep. Tim Walz (D-Minnesota)  reintroduced legislation called, The Bureau of Consumer Financial Protection-Inspector General Act of 2015, which would create the Office of an Independent Inspector General position.

The lawmakers argued the new bill would provide greater oversight of the regulator.

On the flip side, Maxine Waters, (D-California) praised the CFPB’s track record, adding that it has delivered $5.3 billion in relief to 15 million American consumers and service members since its inception in 2011.

“Taking their strategy from Wall Street, predatory lenders and other bad actors in our financial system – the Republicans on this Committee have advanced countless measures that would undermine the CFPB’s ability to protect consumers from deceptive marketing, unlawful debt collection, lending discrimination, illegal fees, and other unscrupulous activity,” Waters added.

In Cordray's testimony, he insisted that the bureau has been responsible for improving consumer safety in the mortgage market.

“Our Ability-to-Repay rule, also known as the Qualified Mortgage rule, put new guardrails in place to prevent the kind of sloppy and irresponsible underwriting that had precipitated the crisis,” Cordray said. “Our mortgage servicing rules offered new and stronger protections to homeowners facing foreclosure. And our other rules addressed significant problems in the mortgage market deemed in need of repair."

"During this period, we continued our extensive work on regulatory implementation by providing tools and resources to assist industry in implementing our final rule to consolidate and streamline mortgage disclosure forms at both the application stage and the closing stage.”

Click here to read his full testimony.