Cordray to leave CFPB by end of month

November 15, 2017

WASHINGTON — Consumer Financial Protection Bureau Director Richard Cordray sent an email to staff Wednesday announcing that he is leaving the bureau.

Cordray has long been rumored to be planning to run for governor in Ohio, but in the email he did not say what he plans to do after his departure

“I wanted to share with each of you directly what I have told the senior leadership in the past few days, which is that I expect to step down from my position here before the end of the month,” Cordray said in the note.

Cordray helped set up the bureau, which was created by the Dodd-Frank Act. He was confirmed as director in 2013.

“As I have said many times, but feel just as much today as I ever have, it has been a joy of my life to have the opportunity to serve our country as the first director of the Consumer Bureau,” Cordray said. He said the bureau has “made a real and lasting difference that has improved people’s lives, notably: $12 billion in relief recovered for nearly 30 million consumers.”

While Cordray’s term as the bureau’s director featured several high-profile actions, including a massive enforcement action against Wells Fargo over the bank's fake-accounts scandal, it was also a tumultuous one marked by tensions between the bureau and Republicans.

His leaving will have an immediate impact on the CFPB, which is almost certain to be pushed to the right by a Trump appointee, though experts have clashed over who would succeed Cordray in the job. Some have suggested David Silberman, the acting deputy director, would immediately become director, setting up a potential showdown with the Trump administration.

Senate Democrats were already gearing up for a fight against a Trump nominee, though because the nomination can no longer be filibustered, they have little ability to stop it.

"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," wrote Sen. Elizabeth Warren, D-Mass., on Twitter. "This is no place for another Trump-appointed industry hack."

Sen. Sherrod Brown, the top Democrat on the Banking Committee, said in a press release that "the White House has said it wants to stand up for the middle class. If that's true, the President must nominate a successor who will put working people ahead of Wall Street."

Industry representatives, meanwhile, have expressed hope that Cordray's impending departure would help lead to structural reforms of the agency.

Richard Hunt, president and CEO of the Consumer Bankers Association, said in a statment: “Congress should use this vacancy as an opportunity to establish a bipartisan, Senate-confirmed commission to uphold the Bureau’s important mission of consumer protection for the long-term. A Commission will establish transparency and bring a diversity of thought and additional insight to ensure rules are beneficial to consumers and the economy.”

Cordray's departure also could have an impact on a closely watched appeals court battle, PHH v. CFPB, in which the D.C. Circuit is expected to rule later this year on whether the bureau's single-director structure is unconstitutional. If an appeal by the CFPB is upheld, and then challenged, the Justice Department could decide not to defend the federal agency before the Supreme Court.