Monday, January 9, 2012

Can Richard Cordray clean up Abusive Practices by US Financial Institutions? Here are his plans

On January 5, 2012, Richard Cordray was appointed Director of the US Consumer Financial Protection Bureau, created under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. In his formal remarks, Mr. Cordray explained his focus. He noted that consumers need: (1) better information about the costs and risks of borrowing, (2) to be able to comparison shop for a good deal, and (3) the peace of mind that comes from knowing that the deal they were promised is the deal they are actually getting, not just tomorrow, but next month and next year as well. Consumers also deserve to have someone who will stand on their side, who will protect them against fraud, and who will ensure they are treated fairly in the financial marketplace.

He also noted that the role of the CFPB will be to: (1) collect stories and complaints regarding actions of financial institutions and (2) enforce provisions of financial legislation regarding non-bank financial institutions, such as payday lenders, mortgage servicers, mortgage originators (including mortgage brokers) and private student lenders.

In a TV interview with MSNBC, Mr. Cordray provided additional insight into his new job. He explained that the role of the CFPB will be two-fold: (1) examine financial institutions (i.e. conduct on-site supervision with his staff) and (2) enforce the law through the courts and through administrative procedures.

The appointment was made as a recess appointment, that is, while Congress is on recess over the New Year. The occasion provided a humorous view on the ways in which the US government is run, compliments of The Daily Show with Jon Stewart.
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