After months of speculation and years of criticism from Republican lawmakers, Richard Cordray, the first and only director of the six-year-old Consumer Financial Protection Bureau, announced that he will resign at the end of November.
In a Wednesday memo to staff obtained by several news organizations including Government Executive, Cordray did not specify his plans, but said nothing to quash the reports that he preparing a run for governor in his home state of Ohio.
In his email praising the bureau stood up in 2011 as “far more than its director,” Cordray said:
It has been a joy of my life to have the opportunity to serve our country as the first director of the Consumer Bureau by working alongside all of you here. Together we have made a real and lasting difference that has improved people’s lives, notably: $12 billion in relief recovered for nearly 30 million consumers; stronger safeguards against irresponsible mortgage practices that caused the financial crisis and hurt millions of Americans; giving people a voice by handling over 1.3 million complaints that led to problems getting fixed for vast numbers of individuals; and creating new ways to bring financial education to the public so that people can take more control over their economic lives.
Cordray, 58, expressed pride in the staff for being “dedicated to pulling together in supporting and protecting people and making every consumer count.”
The agency created after the 2008-2009 financial collapse became active in protecting consumers from corporate predations in such areas as payday loans, student loans, and bank and credit card fees. But the independent agency funded by the Federal Reserve was never able to shake Republican determination to roll back its powers through legislation or the courts to make it more responsive to congressional purse strings.
The bureau’s structure that insulates its director from the president was found unconstitutional in an appeals court ruling last October.
One nemesis, House Financial Services Committee Chairman Jeb Hensarling, R-Texas, on Wednesday issued a statement saying, “We are long overdue for new leadership at the CFPB, a rogue agency that has done more to hurt consumers than help them. The CFPB tramples on the fundamental economic rights of American citizens, taking away their choices and opportunities,” he said. “The extreme overregulation it imposes on our economy leads to higher costs and less access to financial products and services, particularly for Americans with lower and middle incomes. It has routinely denied market participants their due process rights. All this harm is made even worse by the fact that the CFPB is structurally unconstitutional and completely unaccountable to the American people.”
Consumer groups tended to back the bureau.
“Richard Cordray has been a fierce advocate for consumers and an effective leader of the CFPB,” said Anna Laitin, director of financial policy for Consumers Union. “During his tenure, the financial watchdog has won billions of dollars in relief for Americans cheated by shady banking practices, predatory lending, and other financial scams. He leaves behind a legacy of accomplishment that has benefitted millions of Americans and helped ensure consumers get a fair deal when they shop around for a loan, open a bank account, or make a purchase with their credit card.”
Bartlett Naylor, financial policy advocate for Public Citizen, said his group “applauds Director Cordray for his vigilant enforcement of consumer financial protection laws. Millions of victims have been made whole under his stewardship. The Trump administration must appoint a successor who equals his zeal. That will be good for America and good politics.”
The CFPB’s mission “has never been about one person or one administration,” said Karl Frisch, executive director of the nonprofit Allied Progress. “Its statutory mission is to protect consumers from the type of reckless practices that led to the economic collapse of 2008. That’s why a vast majority of Americans from across the political spectrum support the CFPB and the important work it does to protect them from the worst practices of big banks, credit card companies and other financial predators.”
Frisch then asked whether President Trump, who has reportedly been planning a replacement for Cordray for months, would “pick a champion of consumers in the mold of Richard Cordray or a champion of big banks and Wall Street? His rumored short list is not encouraging. That’s why Allied Progress will fight to ensure that the next director follows the law and continues to hold powerful financial institutions accountable for fraudulent activities and abusive practices.”