We’re just one day from hearing what CFPB Director Richard Cordray has to say about the regulatory environment of consumer financial services in the U.S., as he is set to deliver his semi-annual report to Congress on Wednesday (March 16).
Among the topics expected to be discussed: the CFPB’s regulation over the automotive industry, its policies on short-term, small-dollar credit products, its reaction to claims that the bureau has mismanaged issues and other updates on consumer payday lending regulation.
As for the alleged mishandling of issues, the House Financial Services Committee is set to question CFPB Assistant Director Patrice Ficklin about whether or not his agency distributed money improperly. As for Cordray’s meeting the following day, the committee’s hearing will be used to determine if the organization, management and actions of the CFPB are up to par with what’s expected of it.
Cordray’s testimony is expected to play a heavy role in determining how the committee should move forward with any changes to the organization. This is the first time Cordray is appearing before this committee, and he will be facing a tough seat, with questions coming from the Republican-controlled committee, which is not particularly keen on the bureau. In fact, Chairman Rep. Jeb Hensarling (R-Texas) has been one of the CFPB’s most outspoken critics since its inception.
“The CFPB undoubtedly remains the single most powerful and least accountable federal agency in all of Washington,” Hensarling was quoted as saying by DSNews. “When it comes to the credit cards, auto loans and mortgages of hardworking taxpayers, the CFPB has unbridled discretionary power not only to make those less available and more expensive but to absolutely take them away. Consequently, Americans are losing both their financial independence and the protection of the rule of law.”
The CFPB has been tackling topics like banks and low-risk checking services, as well as online marketplace lenders and payday lending regulation.
In February, the CFPB announced it was taking the necessary steps toward banks having to improve checking account access by offering lower-risk, lower-cost checking account options. This happened following concerns that “consumers are being sidelined by the lack of account options and by inaccurate information used to screen potential customers.” What the CFPB did as part of this action was send a letter to the 25 largest retail banks encouraging the lower-risk checking accounts in order to help consumers avoid overdraft fees.
Also in February, there was chatter from lawmakers who were urging the CFPB against payday rule regulation. This has been part of an ongoing battle between the states and the agency; several Republicans and other lawmakers have said the bureau should not try to circumvent state laws with a pending proposal centered on payday loans.
Earlier this month, the CFPB opened up its online forum for accepting consumer complaints geared at those who have experienced issues from online marketplace lenders. The bureau also released a bulletin about the marketplace lending industry and provided tips for consumers who are looking for alternative financing options.