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Richard Cordray quits as Consumer Financial Protection Bureau director Outgoing US consumer chief moves to thwart Trump by naming own successor
(about 17 hours later)
Richard Cordray, the first director of the Consumer Financial Protection Bureau (CFPB), tendered his resignation on Friday. The director of the Consumer Financial Protection Bureau (CFPB) resigned on Friday and named his own successor, leading to an open conflict with Donald Trump, who announced a different person as acting head of the agency later in the day.
Simultaneously, he named his own successor, setting up another battle with the Trump White House over control of the powerful federal watchdog. That means there are now effectively two acting directors of the CFPB, when there should only be one.
The CFPB was created following the 2008 financial crisis and subsequent recession and given a broad mandate to be a watchdog for consumers when they deal with banks; credit card, student loan and mortgage companies; as well as debt collectors and payday lenders. Typically an acting director position would be filled according to the Federal Vacancies Reform Act of 1998. But along with his resignation, Richard Cordray elevated Leandra English, the agency’s chief of staff, to the deputy director position.
Under the Dodd-Frank Act that created the CFPB, English would thus become acting director. Cordray, a Barack Obama appointee, cited the law when he moved English, a longtime CFPB employee and ally, into that position.
Within a few hours, Trump announced his own acting director of the agency: Mick Mulvaney, who is currently director of the Office of Management and Budget. Mulvaney had widely been expected to be Trump’s temporary pick for the bureau until a permanent one could be found.
Mulvaney is a long-time critic of the CFPB and has wanted the agency’s authority significantly curtailed. The difference between English and Mulvaney running the agency would be significant.
The person nominated to be director of the CFPB requires confirmation by the Senate, and it could be many weeks or months before the person would be able to step into the role permanently.
Cordray’s move was aimed at allowing his favored successor to keep running the agency for as long as possible.
Cordray had announced earlier this month that he would resign by the end of this month. There is wide speculation that he is resigning in order to run as a Democrat for governor in his home state of Ohio.
The CFPB was created as part of the laws passed following the 2008 financial crisis and subsequent recession. The agency was given a broad mandate to be a watchdog for consumers when they deal with banks and credit card, student loan and mortgage companies, as well as debt collectors and payday lenders.
Nearly every American who deals with banks or a credit card company or has a mortgage has been affected by new rules the agency put in place.Nearly every American who deals with banks or a credit card company or has a mortgage has been affected by new rules the agency put in place.
Cordray used the agency’s mandate aggressively, which often made him a target for Washington banking industry lobbyists and Republicans in Congress who believed he was overreaching in his role, calling the CFPB a “rogue agency”. Cordray used the agency’s mandate aggressively as its first director, which often made him a target for the banking industry’s Washington lobbyists and Republicans in Congress who believed Cordray was overreaching in his role, calling the CFPB a “rogue agency”.
As director, Cordray was able to extract billions of dollars in settlements from banks, debt collectors and other financial services companies for wrongdoing. When Wells Fargo was found to have opened millions of phony accounts for its customers, the CFPB fined the bank $185m, the agency’s largest penalty to date. As director, he also was able to extract billions of dollars in settlements from banks, debt collectors and other financial services companies for wrongdoing. When Wells Fargo was found to have opened millions of phony accounts for its customers, the CFPB fined the bank $185m, the agency’s largest penalty to date.
Cordray, a Democrat appointed by Barack Obama, announced this month that he would resign by the end of November. There is wide speculation that he will run for governor of Ohio, his home state.
As Cordray announced his resignation, he elevated Leandra English, the agency’s chief of staff, into the deputy director position. With Cordray’s resignation, English will become acting director.
By naming English as deputy director, Cordray sets up a fight with the Trump White House.
The CFPB director requires confirmation by the Senate and it could be many weeks or months before he or she is able to step into the role. While likely to be fought by those opposed to Cordray and the CFPB, Cordray’s move will allow his favored successor to keep running the agency for as long as possible before a Trump appointee is able to take over.