Consumer bureau leader to leave post
Richard Cordray, one of the few remaining Obamaera banking regulators, said Wednesday that he plans to step downas head of the Consumer Financial Protection Bureau by month’s end, clearing the way for President Donald Trump to remake a watchdog agency loathed by Republicans and Wall Street.
Cordray’s decision is likely to renew speculation that he will run for governor of Ohio, where he once served as attorney general. His term does not end until next summer, but to run he would have to declare his candidacy by February. Cordray has declined to answer questions about his political ambitions.
Cordray’s decision comes just a month after the bureau suffered a major rebuke from Republicans in Congress who took the unusual step of block- ing an agency rule that would have allowed consumers to sue their banks for the first time. Cordray appealed to President Donald Trump directly not to sign the legislation butwas rebuffed.
“I trust that new leadership will see that value also and work to preserve it — perhaps in different ways than before, but desiring, as I have done, to serve in ways that benefit and strengthen our economy and our country,” Cordray said in a message to employees.
Republicans had become increasingly exasperated that Cordray, whose term does not end until next summer, hadnot stepped down and that the agency continued to issue aggressive rules disliked by the business community
With Cordray’s departure, the aggressive regulatory structure put in place by the Obama administra- tion in the wake of the global financial crisis has been nearly entirely replaced.
The head of the Securities and Exchange Commission has been replaced by a former Wall Street lawyer, and the Senate is moving to approve Trump’s pick to lead the Office of the Comptroller of the Currency, another important banking regulator. The head of the Federal Deposit Insurance Corp., Martin Gruenberg, has said he will step down at the end of the month.
The transformation coming for the CFPB could be significant.
The agency was one of the central achievements of the Obama administration after the 2008 financial crisis.
Created under 2010’s financial reform bill, known as Dodd Frank, it regulates the way banks and other financial companies interact with consumers, policing everything from payday loans to mortgages. It has extracted billions in fines from big banks, including $100 million from Wells Fargo last year for opening millions of sham accounts that customers didn’t ask for
Within minutes of Cordray’s announcement, one of the bureau’s staunchest critics, Rep. Jeb Hensarling, R-Dallas, chairman of the House Financial Services Committee, cheered the move.
“We are long overdue for new leadership at the CFPB, a rogue agency that has done more to hurt consumers than help them,” said Hensarling, who has touted legislation that would strip the agency of many of its powers. “The extreme overregulation it imposes on our economy leads to higher costs and less access to financial products and services, particularly for Americans with lower and middle incomes.”