CFPB Structure and Military Lending Focus of Nomination Hearing for CFPB Director

On Sept. 6, the U.S. Senate Banking Committee held a hearing on the nomination of Richard Cordray to be the Director of the Consumer Financial Protection Bureau. Cordray, a former Ohio Attorney General, currently leads the bureau’s Division of Enforcement. AFSA attended the hearing and has been following the progress of the nomination closely.

 

The majority of the committee’s Democratic members attended the hearing, but only two Republican senators were present to question Cordray. The hearing focused less on the nominee’s background and qualifications than the structure and role of the bureau itself, which remains the subject of continued partisan discord. Forty-four Senate Republicans have pledged not to confirm any director until certain structural reforms are implemented to improve the governance of the agency and impose checks and balances on its regulatory powers and funding. AFSA supports those proposed reforms.

 

During the hearing, committee Chairman Tim Johnson (D-SD) admonished his colleagues for holding up the confirmation process, asserting that the absence of a director places community banks and credit unions at a disadvantage relative to non-bank financial institutions. Pushing back, committee Ranking Republican Richard Shelby (R-AL) described the unprecedented authority granted by the Dodd-Frank Act to the agency’s director, who will ultimately determine which consumers have access to credit and the range of financial products available to them. Senator Bob Corker (R-TN) emphasized the lack of accountability in the current structure. Responding to these concerns, Cordray pledged to always follow the law, be responsive to congressional oversight and submit the bureau to audits, should he be confirmed as director.

 

Several committee members expressed anxiety over perceived risks to military personnel and their families. Cordray noted that he was spending time studying these issues and meeting with military officials to identify problem areas, while praising the leadership of Holly Petraeus as head of the bureau’s Office of Servicemember Affairs. AFSA has had the privilege of meeting with Petraeus and looks forward to continuing to work with her to understand the unique circumstances surrounding military consumers of financial services.