Cordray Points to Wells Fargo in Defense of CFPB to Congress

By Jeff Bater

Consumer Financial Protection Bureau Director Richard Cordray plans to defend the embattled bureau during an appearance April 5 on Capitol Hill and will aim at three familiar targets as he pledges to keep the agency on course.

Cordray said credit reporting, debt collection and financial performance incentives such as those involved in the Wells Fargo fake accounts scandal are areas the CFPB is watching closely.

”We know we have much more to do to clean up the consumer financial marketplace,” he said, later adding, “Those who talk about weakening the Consumer Bureau are missing the importance of the work we are doing to stand up for individuals and families all over this country.”

Cordray’s prepared opening statement was released April 4, a day in advance of an appearance scheduled before the House Financial Services Committee. In past appearances before the House panel, Cordray’s testimony has been followed by a barrage of hostile questions from Republicans and words of support from Democrats.

The committee chairman, Rep. Jeb Hensarling (R-Texas), has called on President Donald Trump to fire Cordray and is a driving force behind efforts to change the agency’s leadership structure to a five-person commission and curb many of its powers.

Work Continues

Cordray said the CFPB is making steady progress in cleaning up credit reporting but is nonetheless flooded with complaints. “Clearly more work remains to be done,” he said.

Likewise, debt collection is “a big problem that will take time to fix properly,” he said. The bureau announced a regulatory outline in July 2016 that would overhaul the debt collection market.

Two months later, the CFPB announced it had joined the Office of the Comptroller of the Currency and the city of Los Angeles in a crackdown against Wells Fargo for unauthorized opening of accounts to meet sales goals.

“By completing a public enforcement action with a record fine, we blew open a scandal whose far-reaching effects are being felt across financial markets to this day. We are keeping a close eye on these practices and insisting that all banks and financial companies must carefully monitor their incentive programs to avoid such problems,” Cordray said.

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