Republicans and President Trump want to wrest the power from the Consumer Financial Protection Bureau (CFPB), a consumer watchdog put into place under former President Obama, but its director Richard Cordray last week was out defending the agency he heads.
According to a report, speaking during a U.S. Chamber event, Cordray defended the agency from a charge that it engages in regulation via enforcement.
“First of all, rule making is prospective in nature and by definition then, in many respects, more evenhanded. But it does take time to fashion the rules, and it is a difficult process. It requires a lot of data, a lot of thought, a lot of input,” Cordray said. “Enforcement is different. It’s meant to address particular situations that arise. It’s much more factually based. It may be more unique to a certain circumstance than a rule making. It needs to be.”
According to Cordray, the CFPB releases detailed orders under its enforcement actions to send a warning to the market. Companies that engage in conduct the CFPB finds fault with should know they face the risk of an enforcement action, he said.
“If we don’t enforce with the principle of equal justice in mind, then you’re taking random enforcement actions here and there that don’t have any generalized impact,” Cordray said. “That is why, when we take enforcement actions, we make a point to publish a detailed order describing what the facts were.”
The report noted the comments on the part of Cordray comes as he gears up to defend the CFPB’s single-director structure during May at a the U.S. Court of Appeals for the D.C. Circuit. In October, a three-judge panel struck down the CFPB’s structure, saying it was unconstitutional. The divided panel said the president of the U.S. should be able to fire the director of the CFPB for more than just cause. The full appeals court will hear the case on May 24, noted the report.
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