New consumer protection agency chief touts ‘active’ enforcement division

The director of the federal Consumer Financial Protection Bureau said the agency created under the 2010 Wall Street reform law has initiated a number of investigations, including probes of large banks.

“We … have an active enforcement division that is looking carefully at many things. They have investigations ongoing,” said Richard Cordray, the CFPB’s first director who was appointed by President Obama in January.

Cordray, speaking on C-SPAN’s “Newsmakers” program airing this weekend, said that he can’t talk about specifics of ongoing law enforcement activity. But Cordray noted the probes involve a wide range of financial institutions.

{mosads}“Our investigations, our examinations, we are dealing with all institutions top-to-bottom and we do have open matters we are looking at involving a range of institutions, large banks, smaller banks, and non-banks,” he said.

President Obama used a recess appointment in January to install Cordray at the agency, a move that drew strong protest from GOP lawmakers who had promised to block the confirmation of any nominee to the position.

The CFPB, which opened its doors last July, has a wide mandate to prevent abuses that encompasses enforcement, regulation and supervisory programs aimed at a range of financial institutions.

He touted the work of examiners at banks, payday lenders and other types of institutions.

Cordray, the former attorney general of Ohio, said on C-SPAN that the bureau is already spurring changes in some companies’ behavior, noting for instance that some credit card and mortgage companies are improving their agreements with consumers.

“Not everything is achieved through some compulsory process. If you can signal more clearly to the market the direction you are going, there is a certain amount of interest among some of the good businesses in trying to get out ahead and understand what is expected of them,” he said.

“I think the mere fact that people understand that we are out there looking at whether consumers are being treated fairly means that they are having to think more in their compliance regime about whether they are treating consumers fairly,” Cordray added.

He said one goal has been the improving “the simplicity and clarity and understand-ability of the agreements that are used.” 

“We are pushing for that in the credit card realm, in the mortgage realm. We have institutions that have signed up with us to work with us on simplifying their agreements as . . . pilot projects, we have others who are bringing things to us on their own that represent shorter, clearer, simpler, appropriate-grade reading level agreements that are much more understandable and accessible for consumers,” Cordray said. “We clearly are stimulating the market on that.”