Richard Cordray, the first and only Director of the Consumer Financial Protection Bureau, announced today that he will resign from the Bureau by the end of November–presumably in order to explore a run for governor in his home state of Ohio. Cordray, a Democrat, was appointed to serve as the agency’s first Director in a recess appointment by former President Obama in 2012. He was subsequently confirmed by the Senate in July of 2013. Since that time, Cordray has been the face of the young agency as it pursued aggressive policy and enforcement initiatives.
Cordray remained at the CFPB longer than many anticipated amid speculation of his political ambitions, thereby ensuring the release of the Bureau’s Payday Rule and Arbitration Rule, the latter of which was recently repealed by the Republican-led Congress and President Trump.
President Trump will now have the opportunity to name a new leader for the Bureau. In the short run, the President may appoint another Senate-confirmed individual to run the agency, such as Treasury Secretary Steven Mnuchin, who could then turn over day-to-day responsibilities to a subordinate. Given the substantial authority afforded the Bureau Director, this change in leadership may pave the way for substantial changes in Bureau processes, policies, and priorities in the near term.
Director Cordray’s accomplishments include sweeping new regulations relating to mortgages, prepaid cards, and payday lending, as well as settlements of enforcement cases that produced billions of dollars in redress to customers. At the same time, the Director has suffered some significant defeats, including sharp criticism from the courts and Congress for over-reaching, culminating in the recent rejection by Congress of six years of work by the Bureau on its Arbitration Rule.
The Director leaves at a time when the constitutionality of the Bureau’s single-director structure remains an open legal issue, and the Bureau remains a partisan football in Congress. Thus, while Richard Cordray’s efforts have given the Bureau its initial form, the CFPB remains a work in progress.