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Auto Finance’s Chief Regulator, Richard Cordray, to Step Down
November 15, 2017
Richard Cordray is stepping down as director of the Consumer Financial Protection Bureau at the end of November, he announced in a letter to employees Wednesday morning.
He served as the inaugural director for the regulatory agency, which was formed in the wake of the financial crisis. He reiterated the work the CFPB has done so far to recover $12 billion in relief for nearly 30 million consumers — including fines to auto lenders.
“I have tried to reinforce this year that the [CFPB] is far more than its director,” Cordray wrote to his employees. “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. And 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.”
Most recently, Congress struck down the CFPB’s rule that would have banned the use of forced arbitration in loan contracts. The bureau also passed a rule earlier this year limiting the use of short-term title and payday auto lending.
The most high-profile case Cordray led was a $185 million fine of Wells Fargo & Co. for the bank’s fake checking accounts scandal in 2016. Earlier this year, Wells Fargo Dealer Services admitted to falsely charging consumers for insurance they did not need, and Cordray has said the bureau is investigating those actions.
More broadly, his leadership at the CFPB has changed the way the industry approaches compliance in the space. While other regulators such as the Office of the Comptroller of the Currency and the Department of Justice may have fined more players in the auto finance space than the CFPB, the bureau did more to change the rules and expectations after the financial crisis.
For example, the bureau has examination authority, lenders are expected to upkeep comprehensive compliance management systems, and the CFPB publicly publishes a database of consumer complaints and notifies the financial institutions responsible.
“I thoroughly appreciate Director Cordray’s willingness to serve as the first director of the CFPB,” Richard Hunt, president and chief executive of the Consumer Bankers Association, said in a statement. “While we might not have always seen eye-to-eye, he was accessible and we enjoyed a mostly cordial relationship.”
Hunt, like many industry advocacy groups, are calling on Congress to use this opportunity to eliminate Cordray’s position and turn it into a bi-partisan, Senate-confirmed commission.
Cordray, a former Ohio attorney general, has been widely speculated to run for governor of his home state in 2018, however, he made no mention of it in remarks this week.