Hensarling Queries CFPB’s Cordray on Possible Exit, Payday Rule

By Rob Tricchinelli

House Financial Services Committee Chairman Jeb Hensarling (R-Texas) is questioning whether Consumer Financial Protection Bureau Director Richard Cordray is rushing to finish a rule on small-dollar lending before his possible departure from the agency.

In a letter dated Aug. 28, Hensarling cited news reports that the CFPB is moving quickly to finalize the payday rule before Cordray’s possible exit to run for governor of Ohio. Hensarling told Cordray that his “personal political ambitions may be informing decisions” he is making “regarding what is supposed to be a nonpartisan and objective agency rulemaking process governed by the Administrative Procedure Act.”

Cordray has not responded to news reports about his potential gubernatorial bid. Hensarling gave Cordray a deadline of tomorrow to confirm whether he will step down as director before the end of his term in July 2018, and, if so, when.

“We’ve received the letter and are reviewing it,” Sam Gilford, a CFPB representative, told Bloomberg BNA.

‘Categorical Denial’

The CFPB rule, as proposed in June 2016, is meant to help strapped borrowers stay out of a cycle of debt and endless fees by requiring payday lenders to determine their ability to repay and placing restrictions on repeat loans. The proposal covers short-term credit such as payday loans, as well as high-cost installment loans.

Hensarling asked Cordray for his “categorical denial” that political considerations were motivating the timing of a potential final rule and his assurance that all records related to the rulemaking would be preserved the bureau.

“Simply put, there is no valid legal basis for accelerating a federal rulemaking to satisfy an arbitrary deadline necessitated by election dates established under Ohio law,” Hensarling said.

For the 2018 governor race, Ohio Democrats have scheduled their first pre-primary debate for Sept. 12.

To contact the reporter on this story: Rob Tricchinelli in Washington at rtricchinelli@bna.com

To contact the editor responsible for this story: Michael Ferullo at MFerullo@bna.com

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