Consumer Financial Protection Bureau – Consumer Watchdog Agency That Even the GOP supports

Consumer Financial Protection Bureau

 

Richard Cordray, the Democrat who heads the Consumer Financial Protection Bureau, has been the subject of Republican criticism since President Barack Obama appointed him in 2012. Credit Andrew Mangum for The New York Times

 

Consumer Financial Protection Bureau

Consumer Financial Protection Bureau

With the election of President Trump, the nation’s consumer watchdog agency faced a quandary: how to shield the Obama-era institution from a Republican administration determined to loosen the federal government’s grip on business.

In the weeks after the election, Richard Cordray, the Democrat who leads the agency, the Consumer Financial Protection Bureau, directed his staff to compile stories from ordinary Americans thanking it for resolving complaints.

The anecdotes, which he solicited in an email to share with the Trump transition team, could provide a counterpoint to critics who had cast the agency as a regulatory scourge on the economy. And implicit in his request to employees was the belief that some accolades would come from parts of the country that helped elect Mr. Trump — evidence that the popularity of consumer safeguards transcends party divisions.

“There must be hundreds of such stories,” Mr. Cordray wrote in the email in November, which was obtained in a public records request. He added, “I can think of no better vindication” of the agency’s consumer relief efforts.

While many federal agencies have begun to loosen the reins on the companies they regulate, the Consumer Financial Protection Bureau, born out of the Dodd-Frank financial law in 2010, has taken the opposite course. Congress granted it unusually broad authority — and autonomy from the White House and Congress — to both enforce existing federal rules and write new ones, including issuing fines against financial companies.

Under Mr. Trump it has openly embraced its mission, cracking down on debt collectors, pushing out a major new financial rule on arbitration and pursuing a flurry of enforcement actions against payday lenders and others.

A payday loan store in Appleton, Wis. Payday lenders have flooded the consumer bureau with more than a million comments urging it to halt a proposed crackdown on the industry.

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The approach, outlined in emails and other documents obtained through the public records request by The New York Times, comes as the Trump administration has taken an uncharacteristically low-key public stance toward the agency, a prominent blue holdout in a federal regulatory regime newly awash in red.

The White House’s restraint was based in part on a pragmatic assessment, according to people familiar with the strategy. At one point, contemplating a high-profile run on the agency, the White House examined polling data from political bellwether states, two people briefed on the matter said. The agency, they concluded, was too popular to pick a public fight with.

Republicans in Congress, who have vehemently opposed the agency since its creation, have also been unable to muster enough support to derail its work. Efforts to strike down a rule ordering new consumer protections on prepaid debit cards never made it to a vote in either the House or the Senate.

“The public does not share the G.O.P.’s ire toward the agency or its mission,” said Dean Clancy, a Tea Partyactivist who worked in the White House under President George W. Bush and is now a policy analyst who tracks actions of the consumer bureau. “It is an agency about protecting the little guy, and that is tough to oppose.”

The stories of gratitude rounded up by the agency’s staff for Mr. Cordray illustrated its appeal. Among them was a homeowner in Tennessee who got a disputed lien removed from a property, someone in Kentucky who got assistance warding off a debt collector pursuing a medical bill that had been paid, and a person in Pennsylvania who said the agency helped resolve a contested credit card debt.

That doesn’t mean the Trump administration and other opponents have given up on neutralizing the bureau’s work.

Administration officials have isolated the bureau from parts of the government that, under President Barack Obama, helped fulfill its mission. In public statements and documents, officials at the Justice Department, the Treasury Department and the Office of the Comptroller of the Currency have all turned a cold shoulder toward Mr. Cordray and his staff.

Lobbyists for the financial industry are working behind the scenes on efforts to dismantle some of the bureau’s signature initiatives, according to people directly involved in the plans. They include lawsuits to be filed in reliably conservative courts when new regulations are issued.

For now, though, it is mostly a waiting game. Mr. Cordray’s term as director expires next July, when he could be replaced with a sympathetic Trump appointee. That moment could come earlier as there is speculation that Mr. Cordray might resign — perhaps soon — to enter the Democratic primary for governor in Ohio.

“The industry will be very happy to see him out of there,” said Alan S. Kaplinsky, a lawyer with Ballard Spahr in Philadelphia, who represents financial institutions in matters before the bureau. “The people running that agency are definitely Obama people.”

The Trump administration, eager for Mr. Cordray’s exit, has compiled a list of successor candidates in the event of his early departure, according to three people with knowledge of the preparation. Yet Mr. Trump can fire Mr. Cordray only for cause, and such a move would most likely backfire by rendering Mr. Cordray a political martyr among Democrats — perhaps bolstering his chances of winning, should he enter the governor’s race.

Lightning Rod

Since Mr. Trump’s election, Mr. Cordray, 58, has counseled his roughly 1,600 employees to tune out the political noise.

“I encourage you to remain focused on doing your good work on behalf of consumers,” he said, according to a script for a call with employees in late November. “Keep calm and carry on.”

The agency was proposed by Senator Elizabeth Warren, Democrat of Massachusetts, when she was a Harvard professor, to serve as an advocate for consumers in their dealings with financial institutions. Mr. Cordray, who was working at the bureau as its enforcement chief, was made its first director in 2012 in a recess appointment by President Obama, which heightened the partisan rancor over the regulatory crackdown on Wall Street.

Financial executives and lobbyists offer mixed reviews of his tenure.

Photo

Representative Jeb Hensarling has led Republican attacks on Mr. Cordray, calling the bureau “the single most unaccountable and powerful agency in the history of our republic.” CreditPete Marovich/Getty Images

They describe Mr. Cordray as intelligent, pleasant and accessible, willing to meet with industry constituents and hear out their lobbyists. But they also consider him a “definitely ideological” — in the words of Richard Hunt, the chief executive of the Consumer Bankers Association, a banking trade group — leader of an agency that is structured like “a dictatorship.”

“Richard Cordray has gone above and beyond to take C.E.O.s to task on things that he had no jurisdiction over,” Mr. Hunt said.

Mr. Kaplinsky, the financial services lawyer, said Mr. Cordray had stifled innovation in the industry by being too rigid. “It is one guy who calls all the shots,” he said.

Mr. Cordray said he listened to and appreciated his opponents. “Sometimes you look at the critics and say, ‘Nobody else was telling me that, but you were,’” he said in a recent interview.

Since Mr. Trump has taken office, Mr. Cordray has faced increasingly personal attacks. A longtime critic, Representative Jeb Hensarling of Texas, the Republican chairman of the House Financial Services Committee, has led the charge.

Mr. Hensarling championed the Financial Choice Act, a bill approved by the House in June that would reverse many Dodd-Frank regulations, including curbing the consumer agency’s oversight powers and allowing the president to fire its director more easily. A vote has not been scheduled in the Senate.

He also launched an investigation over a contentious new rule that allows consumers to band together in class-action lawsuits against financial firms. Mr. Hensarling later suggested that there were legal grounds to pursue contempt-of-Congress proceedings against Mr. Cordray, accusing him of inadequately responding to subpoenas in that investigation.

Separately, Mr. Hensarling has questioned Mr. Cordray’s political activities in Ohio and called for an investigation into whether he violated a federal law that prohibits federal employees from most political campaign activities.

 

 

Consumer Financial Protection Bureau

 

Consumer Financial Protection Bureau

Consumer Financial Protection Bureau

Consumer Financial Protection Bureau

Consumer Financial Protection Bureau

Consumer Financial Protection Bureau

Consumer Financial Protection Bureau

 

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