Consumer Financial Protection Bureau (CFPB) Director Richard Cordray has announced his resignation, putting to rest rumors of a shake-up by the Trump Administration. Cordray, the agency’s first and only director, is leaving the post at the end of November. The Administration will announce a replacement “at the appropriate time,” according to a statement from the White House.
“I am confident that you will continue to move forward, nurture this institution we have built together, and maintain its essential value to the American public,” Cordray wrote in an email to staff on Wednesday. “I trust that new leadership will see that value also and work to preserve it—perhaps in different ways than before, but desiring, as I have done, to serve in ways that benefit and strengthen our economy and our country.”
Cordray’s departure follows months of speculation. The agency has been in the crosshairs of Republican lawmakers, who argue it embodies the perils of over-regulation, but praised by Democrats, who believe Americans have benefitted from it, and will continue to in the era of Equifax. The agency notably ordered Meridian Title Corporation to compensate consumers for a Real Estate Settlement Procedures Act (RESPA) violation in October, and, in January, ordered Prospect Mortgage and two real estate brokerages to pay penalties for participating in a kickback referral scheme, also a RESPA violation.
Most recently, the agency’s arbitration rule—which allowed for class-action litigation—was overturned by Senate Republicans. At the time, Cordray said the vote is “a giant setback for every consumer in this country…companies like Wells Fargo and Equifax [now] remain free to break the law without fear of legal blowback from their customers.”
Many Republicans, including House Financial Services Committee Chairman Jeb Hensarling (R-Texas), have called Cordray’s position into question, claiming that the agency’s anatomy assigns authority to the director and leaves little room for termination. In February, Hensarling introduced the notion of a “political appointee,” as well as other plans to overhaul the CFPB—a broader initiative by the Trump Administration to undo Dodd-Frank.
“We are long overdue for new leadership at the CFPB, a rogue agency that has done more to hurt consumers than help them,” said Hensarling in response to Cordray’s resignation. “The CFPB tramples on the fundamental economic rights of American citizens, taking away their choices and opportunities…The resignation of the Bureau’s director is an excellent opportunity to enact desperately needed reforms.”
“At the CFPB, Rich Cordray forced the biggest financial institutions to return $12 [billion] directly to the people they cheated,” tweeted Elizabeth Warren (D-Mass.,), who was instrumental in the agency’s creation. “He held big banks accountable. He’s a dedicated public servant [and] a tireless watchdog for [U.S.] consumers [and] he will be missed.
“The new director of the CFPB must be someone with a track record of protecting consumers [and] holding financial firms responsible when they cheat people,” Warren tweeted. “This is no place for another Trump-appointed industry hack.”
In the area of real estate, the CFPB established Know Before You Owe (the TILA-RESPA Integrated Disclosure rule, or TRID), which includes a mandate that mortgage borrowers receive a Closing Disclosure (CD) from their lender at least three business days prior to closing. The agency finalized the rule in July.
“Since being officially nominated more than four years ago as the first director of the Consumer Financial Protection Bureau (CFPB), ALTA has worked closely with Richard Cordray and his staff to help them understand the important role title and settlement agents play in the safe and efficient transfer of real estate,” said Michelle Korsmo, CEO of the American Land Title Association (ALTA), in a statement. “During this leadership transition, ALTA will continue to support CFPB staff to help provide positive and compliant real estate settlement experiences for consumers and lenders, and serve as a resource on important consumer issues such as wire transfer fraud, third-party oversight and mortgage disclosures.”
“I want to congratulate Director Cordray on a successful tenure at the CFPB,” said David H. Stevens, CEO and president of the Mortgage Bankers Association (MBA), in a statement. “He came into the position during a tumultuous time and was successful in solidifying the role the Bureau plays in protecting consumers. As we now pivot to the nomination of a new director, it will be imperative that someone is chosen who can provide a balance between the rulemaking process and the need for clarity and consistency in the direction and guidance given to lenders across the country.”
Stay tuned to RISMedia for more developments.
Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at email@example.com.
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