Cordray Notes Cooperation with States On CFPB Investigations, Enforcement

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By Mike Ferullo

Feb. 26 --Cooperation with attorneys general and bank regulators at the state level will continue to play a prominent role in investigations and enforcement strategy at the Consumer Financial Protection Bureau, the agency's director said.

CFPB Director Richard Cordray told the National Association of Attorneys General that the agency is looking to expand its collaborative efforts with states on problem areas of the financial sector including mortgage servicing, payday lending, and the debt collection market.

“Sometimes our specific authority over federal consumer financial law works better to address issues, and sometimes your consumer protection authorities under state law can more effectively clean up illegal activity that may go beyond the provision of consumer financial products and services,” Cordray said in a Feb. 26 speech.

“We frankly do not care what color uniform the prosecutor is wearing, as long as the bottom line is that we enforce the law vigorously and make things right for consumers,” he added.

The CFPB has launched a government portal that allows the agency to share all of the consumer complaints it receives about financial products with other federal agencies and state authorities. While the attorneys general from California, Virginia, Oregon, and Texas have signed onto the initiative, along with banking regulators in 14 states, Cordray said he would like to see a higher level of participation.

“If you want to know what your constituents are saying about the problems they face in the consumer financial marketplace, our government portal makes it extremely easy to do that,” he said. “We want every attorney general to take advantage of this technology, which will help us see things through the same eyes and find new opportunities to serve consumers more effectively.”

Cordray said that cooperation between the CFPB and states has already yielded some “excellent results,” including a joint lawsuit against online lender CashCall, and a recent $2 billion settlement with Ocwen Financial Corp., the nation's largest nonbank mortgage servicer (26 BBLR 25, 1/2/14).

Ocwen has come under renewed scrutiny in connection with its attempt to buy $39 billion of home loans from Wells Fargo & Co. 

Debt Collection

Cordray said the CFPB also wants input from state officials on regulatory matters, including the agency's effort to set ground rules for debt collection practices.

In November, the agency released more than 5,000 complaints about debt collection practices and issued an Advance Notice of Proposed Rulemaking (25 BBLR 1518, 11/7/13). Cordray said that the CFPB has been seeking guidance from state attorneys general as it drafts a proposed rule.

Cordray said that state officials know the debt collection market “backward and forward.” Not only do attorneys general oversee the activities of debt collectors in their states, they are responsible for collecting debts owed to their state government or universities, he said.

“The results will be better informed, and more balanced, because you are in a position to counsel us in our efforts,” he said.

The CFPB is attempting to craft the first regulations under the Fair Debt Collection Practices Act. A proposed rule expected by the end of 2014 could apply not only to third-party debt collectors, but also to banks and other original creditors to borrowers.

Cordray said the agency has a challenging task in addressing the rapid advances in communications technology that have taken place since the law was enacted in 1977, including e-mail, smart phones, and social media.

“Right now, we are in the early stages of preparing possible proposals, which could lead to the most significant changes in federal law in this area in 37 years,” he told the audience.

To contact the reporter on this story: Mike Ferullo in Washington at

To contact the editor responsible for this story: Joe Tinkelman at

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