Richard Cordray was officially confirmed as Director of the Consumer Financial Protection Bureau over two years after President Obama announced he would appoint Cordray to the post.
Senate Republicans previously blocked Cordray’s nomination in the hopes of reforming the CFPB’s structure to make the powerful agency more accountable to Congress. The GOP was unable to bring the CFPB’s powers and accountability in line with other federal regulatory agencies because of a threat from Democrats that the party would completely overhaul the Senate’s longstanding filibuster rules.
Republicans are not the only ones to criticize the CFPB’s power structure–even the Center for Responsible Lending, one of the CFPB’s earliest and most fervent supporters, expressed concerns about giving so much authority to a single director.
Cordray is now the sole head of a federal agency that has a $600 million budget (guaranteed as a part of the Federal Reserve’s budget) and the wide-reaching authority to regulate the financial sector. His official confirmation means that Cordray’s agenda for the CFPB can move forward; the agency is expected to take “even stronger and assertive compliance positions.”
The newly confirmed director will be expected to resolve many of the criticisms lodged at the agency by members of the financial sector. Banks and other businesses have noted that CFPB regulators refuse to fix mistakes in final regulatory reports, issue overly burdensome (and often redundant) data requests, and “appear to have no organized process for conducting the various categories of examinations, with initial and follow-up requests seemingly random (and of significantly different scope depending on the examination team).”
Resolving these issues could prove to be difficult. High staff turnover (with many leaving to profit from their CFPB experience in the private sector) means that the CFPB’s regulations will continue to be steered by many staffers with little background in financial law.