Cordray: CFPB’s work will always matter

The CFPB director called on banks to help more people access the financial system

Cordray: CFPB’s work will always matter
Consumer Financial Protection Bureau Director Richard Cordray highlighted the importance of the agency’s work during a Labor Day speech, saying the agency is working to address factors behind the continuing income equality among Americans.

“That is why our work will always matter,” said Cordray. “As Dr. Martin Luther King taught us, economic rights are also civil rights. And they matter not just to some of us, but to all of us.”

So far, the CFPB’s enforcement work has resulted in approximately $12 billion in relief to 30 million people, Cordray said. The CFPB has also handled more than a million complaints regarding consumer finance and household credit problems.

“We designed and imposed reforms to fix the mortgage market that had wrecked the economy. And we sent a strong message to banks and large financial companies that in a frank and fair way, the Consumer Bureau would be pushing them to clean up their act and put their customers first,” Cordray said.

Cordray said income inequality is one of the drivers behind the issues dealt with by the CFPB as these pushes families into situations where they need to stretch their dollars to meet their needs. Cordray said this income equality is made worse because of three other forms of financial equality: inequality of wealth, unequal access to financial services, and lack of access to traditional credit.

According to Cordray, predatory practices during the financial crisis led millions of people to lose the wealth tied up to their homes. Toxic loans and super-low teaser rates helped drive inequality in accumulated assets among Americans as the goal of homeownership turned out to strip millions of their wealth as well as ruin their credit records.

“To keep this calamity from happening again, our agency imposed strong consumer protections that prevent lenders from setting people up to fail with mortgages they cannot afford. Our rules also protect against the kind of surprises and runarounds that prevented too many people from saving their homes,” the CFPB director said.

However, the CFPB has been the target of sharp criticism from both industry groups and Republican lawmakers. Cordray himself has been the subject of recent controversy, as rumors that he intends to run for office have led to questions about whether he may be violating election law by continuing to serve in an executive-branch post.

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