What’s The Future Of The CFPB After Cordray?
Richard Cordray, head of the Consumer Financial Protection Bureau, announced he will step down as the head of the agency at the end of this month. Cordray did not provide a reason for this decision, but the timing would allow him to enter the race to be the Governor of Ohio.
Cordray was the bureau’s first director, appointed by President Obama when the CFPB was formed six years ago. Over the course of his leadership, Cordray has become a favorite among Democrats because of his willingness to fight against businesses on behalf of consumers. In the first half of 2017, the bureau recovered $14 million for consumers. His policies and opinions have usually met great controversy, especially since President Trump has taken office.
Cordray’s term was not scheduled to end until the summer, though some were surprised he did not step down when Trump was inaugurated. Trump could not remove Cordray from the position without cause, but his voluntary leave opens the door for a new Republican-approved head of the CFPB.
This decision comes just two weeks after President Trump signed a repeal of the CFPB’s arbitration rule. The rule protected consumers from being forced into arbitration and allowed them to file class action lawsuits against banks, credit unions and credit card companies in events of unfair behavior. The Trump Administration, backed by Congress, believed the rule opened the door to frivolous lawsuits that could waste time and ultimately cost consumers more money in fees and increased interest rates.
So, what is to come of the CFPB with Cordray’s departure? Cordray wrote an email to members of the bureau stating “I trust that new leadership will see that value also and work to preserve it – perhaps in different ways than before.”
President Trump will undoubtedly appoint a Republican leader who will follow the Administration’s desire to loosen regulations and spark growth in the economy. There are many speculations about who will replace Richard Cordray as director of the CFPB, but the President has not made any official announcements at this time.