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News Now

Washington
Cordray hearing highlights hurdles ahead
WASHINGTON (9/7/11)--Tuesday’s Consumer Financial Protection Bureau (CFPB) nomination hearing “was a formal step forward in the confirmation process” for potential agency director Richard Cordray, but Credit Union National Association (CUNA) Senior Vice President of Legislative Affairs Ryan Donovan added that Cordray’s nomination “still faces several obstacles.” Cordray, who has been serving as the CFPB's assistant director for enforcement and has also served as the attorney general of Ohio and that state's treasurer, was questioned about his qualifications for the director’s position by members of the Senate Banking Committee on Tuesday. He was introduced by committee member Sen. Sherrod Brown (D-Ohio), and Ohio Credit Union League General Counsel John Koslowski was among Cordray’s guests at the hearing. In his opening statement, Cordray noted that the CFPB “will find many opportunities to streamline regulations and disclosures” and would remain accountable to Congress as it does its work, which includes rulemaking, market guidance, consumer education and empowerment, enforcement, and supervision and examination of large banks and many nonbank institutions. The committee’s ranking Republican member, Sen. Richard Shelby of Alabama, called the hearing “premature,” noting that changes needed to be made to the CFPB. However, committee chairman Tim Johnson (D-S.D.) said “the stability of our financial system” depended on having a CFPB director in place. CUNA’s Donovan said “it is not clear whether Cordray’s nomination will be approved by the Senate,” adding that “over 40 Senators have said they will not vote to confirm any CFPB nominee unless changes to the CFPB are enacted.” Those proposed changes include increasing CFPB leadership from a single director to a five-member commission, reforming some operational rules, and adjusting the voting threshold needed for the Financial Stability Oversight Council (FSOC) to set aside or stay a CFPB issued rule to a simple majority. Expanding the FSOC's review authority of CFPB rules has also been proposed. This CFPB related legislation passed on a bipartisan 241-173 House vote in late July, but the Senate prospects for the legislation are in doubt. CUNA has encouraged Cordray to "consider ways in which the bureau can help minimize regulatory requirements for credit unions and other financial institutions" and has also encouraged the CFPB to establish an Office of Regulatory Burden Monitoring to help the agency "track, consider, and help mitigate the cumulative regulatory burden under which credit unions and others must operate."


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