House Financial Services Chairman Jeb Hensarling (R-Texas) told CFPB Director Richard Cordray Wednesday that President Trump should fire him immediately for violations of federal law.
Even before Cordray (pictured) began testifying at a sometimes-heated committee hearing, Hensarling said that a lawsuit that focuses on whether Cordray can be removed for cause or at will should not have any effect on whether Cordray remains in office.
“Either way, I believe the President is clearly justified in dismissing you and I call upon the President – yet again – to do just that, and to do it immediately,” Hensarling told Cordray.
“Mr. Cordray, they really hate you, don’t they?” Rep. Michael Capuano (D-Mass.) said as GOP members blasted the director.
At one point, Cordray accused Rep. Bruce Poliquin (R-Maine) of “character assassination.”
Committee ranking Democrat Maxine Waters (D-Calif.) came to Cordray’s defense, saying, “The Consumer Bureau and Director Cordray are doing exactly the job they are supposed to do, and they are doing it well.”
Cordray defended his agency’s efforts, saying, “They don’t want to give us credit for anything we do.” He added that Republicans attempt to “explain away any positive work done by the Consumer Bureau.”
He said his agency continues to work on such issues as debt collecting and financial performance incentives. He said the CFPB continues to review comments on binding arbitration agreements and payday lending.
And he said that the agency has worked extensively to protect veterans from financial institutions that might take advantage of them. “They are a magnet for predatory lenders,” he said.
But Hensarling painted a vastly different picture of the agency.
He said that under Cordray’s direction, the CFPB has shown an “utter disregard” for protecting markets and has made credit more expensive.
“For conducting unlawful activities, abusing his authority and denying market participants due process, Richard Cordray should be dismissed by our President,” the chairman said. “Today, Mr. Cordray and his CFPB don’t just act as a cop on the beat, they act as legislator, prosecutor, judge and jury all rolled into one.”
However, Waters accused Republicans of simply undermining the agency.
“Republicans have been clamoring to weaken, impede and ultimately destroy the Consumer Bureau since its creation,” she said.
She said GOP members have tried to block a director from being appointed and having failed, they have pushed measures to defund and dismantle the CFPB.
“I want to compliment you for standing your ground,” Rep. Al Green (D-Texas) told Cordray.
And Rep. Charlie Crist (D-Fla.) said he hopes Cordray wears with pride the distinction of being so disliked by financial organizations that take advantage of the poor.
As far as those people are concerned, “You may be the most disliked person in Washington, D.C.,” he said.
Rep. Ann Wagner (R-Mo.) said that while the CFPB has been lauded for taking action against Wells Fargo for employees having opened unauthorized accounts, the agency did not begin enforcement action until the Los Angeles city attorney had done so.
Cordray said that was not the case and that the agency had begun a probe well before then.
Rep. William Huizenga (R-Mich.) said that in entering consent decrees, the CFPB makes financial institutions sound guilty even though there is no finding in the decree.
“We know the facts,” Cordray responded. “They know the facts. They don’t have a leg to stand on.”
Rep. Bill Foster (D-Ill.), said the problems small financial institutions are having should not decrease efforts to provide consumer protection for their customers or lenders.
In advance of the hearings, credit union trade groups sent letters to committee members outlining their problems with the CFPB.
“As expected, the breadth and pace of the CFPB’s rulemaking is troublesome, and the unprecedented new compliance burden placed on credit unions has been immense,” Brad Thaler, NAFCU’s vice president of legislative affairs, wrote.
CUNA President/CEO Jim Nussle said the CFPB does not consider the size and complexity of financial institutions in issuing rules.
“Indeed, we have deep concerns that the Bureau rarely gives the concerns serious consideration,” he wrote. “It appears the CFPB has been blind to the impact of its rules on small institutions and deaf to the concerns expressed by credit unions and their members.”
