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CFPB Report July 19, 2013
Director Cordray Confirmed by the Senate
On Tuesday, July 16, 2013, the U.S. Senate confirmed Richard Cordray as Director of the CFPB, 66-34, as part of a compromise between Senate Democrats and Republicans that prevented a change in the Senate rules known as the ‘nuclear option.’ It is expected this will make the Noel Canning case moot. CBA issued the following statement upon Director Cordray’s confirmation:
CBA congratulates Richard Cordray and his family on being confirmed Director of the CFPB. For the past two years, CBA has worked closely with the Director and the Bureau to create a level playing field in the financial services sector. We will continue to work with Director Cordray to ensure consumers have access to financial products they determine meet their family’s needs.
FTC, CFPB Testifies on Debt Collections in Senate Banking
On Wednesday, July 17, 2013, the Senate Banking Subcommittee on Financial Institutions and Consumer Protection held a hearing entitled, “Shining a Light on the Consumer Debt Industry.” Subcommittee Chairman Brown (D-OH) and Ranking Member Toomey (R-PA) were the only Senators in attendance, with Toomey joining the hearing for one question.
Sen. Brown opened the hearing by criticizing “mega banks” for outsourcing their debt collection activities and for poor recordkeeping practices. He praised the recent confirmation of Richard Cordray as CFPB Director and stated the Bureau is in the process of writing a rule on debt collections. Sen. Brown stated his support for: (1) requiring debt collectors to have all relevant documentation before engaging in collections; (2) mandating that any consumer disputes should travel with the debt; and (3) unverifiable debt or time-barred debt should not be sold or collected. Sen. Toomey inquired about the CFPB’s decision to issue bulletins last week on debt collections, rather than engaging in the rulemaking process.
CFPB Assistant Director Corey Stone said he is in favor of establishing national, uniform documentation standards and the creation of a central repository for debt information accessible to creditors, collectors and consumers. Acting Associate Director Reilly Dolan of the FTC added the identity of the original creditor should be disclosed to consumers in collections.
Senator Portman Introduces Bill to Create an Independent CFPB Inspector General
On July 16, 2013, Senator Portman (R-OH) introduced a bill that would create an independent Inspector General (IG) for the CFPB. Under Dodd-Frank the CFPB is audited by the Fed’s IG, who is appointed by the Fed Chairman and does not require Senate confirmation. Senator Portman’s bill (S. 1310) would require the CFPB to have an independent IG confirmed by the Senate. The bill was ostensibly part of an agreement reached by Senate Republicans and Democrats to confirm Richard Cordray. However, the bill does not have any Democrats as original co-sponsors. “I hope the White House and Rich join me in pushing for this commonsense, bipartisan reform,” Portman said in a press release.
CFPB Makes Key Employee Announcements
On Monday, July 15, 2013, the CFPB announced replacements of key staff. Christopher D’Angelo has been tapped to take over as Chief of Staff, replacing Garry Reeder, who left CFPB in May to join the consulting firm started by former Deputy Director Raj Date. The Bureau named Sartaj Alag Chief Operating Officer, and Laurie Maggiano, a Treasury official, to head up the agency’s program for mortgage servicing and securitization markets. Nora Dowd Eisenhower, formerly a Senior Vice President for the National Council on Aging, is joining CFPB as the Head of Office for Older Americans.