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.  
Continue Reading Richard Cordray Resigns from the CFPB

On November 2, 2017, Consumer Financial Protection Bureau (“CFPB” or “Bureau”) Director Richard Cordray delivered remarks at a meeting of the Consumer Advisory Board in Tampa, Florida. Director Cordray’s remarks touched on the following issues:

  • Reverse Mortgages: Noting that Florida is home to millions of senior Americans, Director Cordray discussed reverse mortgages, a financial product

On May 10, 2017, the Consumer Financial Protection Bureau (“CFPB”) issued a request for information on small business lending. In a press release accompanying the request, the CFPB stated that its goal is to “learn more about how small businesses engage with financial institutions, with a particular focus on women-owned and minority-owned small business,” in order to help “implement [its] data collection rule.” The small business data collection rule, mandated by Section 1071 of the Dodd-Frank Act but not yet proposed by the CFPB, will impose reporting requirements on financial institutions for information concerning “credit applications made by women-owned, minority-owned, and small businesses.” The CFPB has previously clarified that “financial institutions’ obligations under [S]ection 1701 do not go into effect until the Bureau issues necessary implementing regulations.”

The request for information does not come as a surprise, given the CFPB’s indication in its Fifth Annual Fair Lending Report (which we discussed last month) that it will increase its focus on small business lending. In a speech at the Small Business Lending Field Hearing held on May 10, CFPB Director Richard Cordray emphasized that “business opportunity — especially opportunities for small businesses — often hinges on the availability of financing.”

In the request for information, the CFPB acknowledged that it is in the “early stages” of implementing a small business data collection rule that is designed to “fill existing gaps in the general understanding of the small business lending environment” and identify “potential fair lending concerns regarding small businesses.” The CFPB further stated its belief that the rule should cover “an extensive share of the market and contain enough flexibility to analyze different market segments.” At the same time, the CFPB expressed interest in “exploring potential ways to implement [the rule] in a balanced manner” that would minimize burden to both industry and the CFPB.

Continue Reading CFPB Issues Request for Information on the Small Business Lending Market

On April 5, 2017, the House Financial Services Committee held a hearing at which Consumer Financial Protection Bureau (“CFPB”) Director Richard Cordray was the sole witness.  During the five hours of the hearing, a wide partisan split over the performance of the CFPB  and Director Cordray  was on full display.  Throughout, Republicans characterized the CFPB as an unaccountable agency that has limited consumer choice and abused and exceeded its statutory authority.  Democrats, for their part, defended the CFPB, arguing that maintaining the CFPB in its current structure remains indispensable to protecting consumers, and offering effusive praise for Director Cordray’s leadership of the agency.

Continue Reading CFPB Director Richard Cordray Spars with Republicans at House Financial Services Committee Hearing

In separate remarks at the Lendit USA 2017 conference on March 6, 2017, Thomas Curry, the Comptroller of the Currency, and Richard Cordray, the Director of the Consumer Financial Protection Bureau (CFPB), discussed their respective agencies’ approaches to fintech. Although neither agency head made any groundbreaking announcement, their remarks provide an up-to-date summary of the

On February 14, 2017, U.S. Senator Ted Cruz (R-TX) and Rep. John Ratcliffe (R-TX) introduced a bill in the House and Senate to abolish the CFPB.

Excluding its introductory language, the bill reads in full: “The Consumer Financial Protection Act of 2010 (12 U.S.C. 5481 et seq.) is repealed, and the provisions of law amended

The D.C. Circuit today granted rehearing en banc in PHH Corp., et al. v. Consumer Financial Protection Bureau (“PHH”), vacating the prior order that, among other things, found the Consumer Financial Protection Bureau’s (“CFPB”) structure unconstitutional. The court directed the parties to brief a set of questions related to: the constitutionality of the Bureau’s structure; whether the court could resolve the case solely on statutory grounds;  and whether another case, involving the status of Administrative Law Judges (“ALJs”), should affect the outcome here.   Oral argument is set for May 24. Briefs for PHH (and any amici curiae in support of PHH) are due March 10.  Briefs for the CFPB (and any amici curiae in support of the CFPB) are due March 31.

Continue Reading D.C. Circuit Grants Rehearing En Banc in PHH

On January 31, 2017, Senators Sherrod Brown (D-OH) and Elizabeth Warren (D-MA) sent a letter to Democratic Senators arguing that the single director structure of the Consumer Financial Protection Bureau (“CFPB”) should not be replaced with a five-member commission.  Specifically, the Senators warned that attempts to restructure the CFPB are intended “to prevent the agency from doing its job” and would “empower Republicans to strangle the agency” by blocking appointees, which could prevent the CFPB from operating.

In defending the single director structure of the CFPB, the Senators gave examples of two multi-member agencies—the National Labor Relations Board and the Export-Import Bank—where Republicans have blocked appointees and effectively hamstrung operation of the agencies.  The Senators did not mention other multi-member agencies, including the Federal Trade Commission (“FTC”), the Federal Deposit Insurance Corporation (“FDIC”), and the Board of Governors of the Federal Reserve System (“Federal Reserve Board”) that have typically operated in a business-as-usual manner notwithstanding periodically unfilled seats. The FTC, FDIC, and the Federal Reserve Board operate under flexible quorum requirements or delegated authority to establish their own quorum requirements.  The Financial CHOICE Act of 2016, which passed the U.S. House of Representatives in the 114th Congress and would have restructured the CFPB as a five-member commission, provided that as few as two members would constitute a quorum for conducting commission business.  A revised version of the Financial CHOICE Act is expected to be introduced in the 115th Congress; the revised bill may leave the single director structure of the CFPB in place.

Continue Reading Democratic Senators Send Letter to Colleagues Arguing Against Restructuring the CFPB as a Commission

On January 30, 2017, the Consumer Financial Protection Bureau (“CFPB”) filed a complaint in the Eastern District of California against a group of law firms and attorneys, alleging that the defendants charged illegal fees in a debt relief scheme targeted at “vulnerable consumers suffering financial difficulties” in violation of the Telemarketing and Sales Rule (“TSR”), 16 C.F.R. pt. 310. The complaint is related to the CFPB’s 2013 lawsuit against Morgan Drexen, Inc. (“Morgan Drexen”) for substantially similar TSR violations (the “Morgan Drexen litigation”).  Defendants allegedly collaborated with Morgan Drexen beginning in 2007 to create the debt relief scheme, and then took over Morgan Drexen’s business operations before it ceased operations in June 2015 in response to a permanent injunction issued in the Morgan Drexen litigation.  The CFPB contends that defendants continued collecting the same fees from consumers that Morgan Drexen had been enjoined from collecting.

Continue Reading CFPB Sues Group of Law Firms and Attorneys for Illegal Debt Relief Scheme