Yesterday the Senate voted 66 to 34 to confirm Richard Cordray as Director of the Consumer Financial Protection Bureau, who has served as the agency’s acting director since his controversial recess appointment by President Obama in early 2012. Cordray’s confirmation ended what was a long, drawn-out battle waged by Senate Republicans who held up his nomination for several months over concerns about funding and leadership structure of the agency. Ultimately Cordray was confirmed with bipartisan support, with all Senate Democrats and twelve Senate Republicans voting affirmatively for his confirmation.
|CFPB Director Richard Cordray. Photo: NCRC|
The Bureau is already making its presence felt in the mortgage industry. Jeremie Greer, director of government affairs at CFED, and Bill Bynum, CEO of Hope Community Credit Union, speaking at the same event, discussed CFBP’s ability to both “police the bad guys” and highlight successful consumer-centered lending practices, using the recent clarifications of the ability-to-repay rule as an example. The rule, as mandated under the Dodd-Frank Act, is an attempt to protect consumers from unaffordable mortgage products while requiring services to clearly assess consumer’s ability to repay the loan before proceeding forward. The recent clarification exempted Community Development Financial Institutions and other charitable-based and nonprofit lending programs, who—in spite of potentially risky underwriting practices—have had low default rates and without an exemption would not have been able to continue to serve the same client base. This example highlights an important role for the Bureau moving forward—to create regulation that minimizes risks to consumers and lending institutions while continuing to make sure there are financial institutions and mortgages products to meet the needs of low- and moderate-income borrowers.