With newly appointed Consumer Financial Protection Bureau (CFPB) Director Richard Cordray in place, that agency can now take on its full list of responsibilities under the Dodd-Frank Act—including the supervision of nonbank financial entities such as mortgage servicers, payday lenders and student loan firms.
In a statement last week, Cordray said that overseeing these nonbank financial institutions, which “had no regular federal oversight in the run up to the financial crisis” and “led a race to the bottom that pushed aside responsible businesses, including community banks and credit unions, and greatly harmed consumers,” is “a top priority” for his agency. He also said more information on how his agency would regulate these nonbank entities will be provided soon.
Cordray became director of the bureau last Wednesday when President Barack Obama executed a recess appointment that circumnavigated the need for Cordray to be confirmed by Congress.
The CFPB is already involved in several ongoing projects, including mortgage disclosure and closing form revisions. Under Cordray’s leadership, the bureau will now be able to move forward with its Consumer Advisory Board, which will consult with the agency on key issues, and with some regulations that have been stalled—including the regulation of remittances and rules for service providers not currently regulated by the federal government.
The CFPB will also work on rulemaking, market guidance, consumer education and empowerment, enforcement, and supervision and examination of large banks and the three credit unions with more than $10 billion in assets.