CFPB Director testifies before Senate Banking Committee
This morning, Richard Cordray, Director of the Consumer Financial Protection Bureau (CFPB), testified before the Senate Committee on Banking, Housing and Urban Affairs. Mr. Cordray was asked to testify to discuss the CFPB’s semi-annual report to Congress. This is the first such report produced by the new agency which was created by the Dodd-Frank Wall Street Reform Act.
In testimony, Mr. Cordray said that the agency has focused on mortgages, student loans and credit cards during its first year of operation. He said the agency is working to reduce deceptive practices by institutions, but also to increase financial literacy on the part of consumers. To this effect, the agency has pursued a “Know Before You Owe” campaign which it hopes will reduce the number of consumers who take out loans that they cannot afford or do not understand. He also highlighted an online consumer complaint process that has received over 72,000 complaints from consumers.
Mr. Cordray addressed many concerns regarding the regulatory burden that would be placed on banks, noting that compliance challenges may be more burdensome for small and community banks. Mr. Cordray said a community bank advisory council had been convened to gather feedback from these institutions. He said the agency will address this issue on a rule-by-rule basis and will exempt smaller providers from rules when it is appropriate.
Democrats on the Committee praised the actions of the CFPB while Republicans expressed concerns that there is too little oversight of the CFPB.