NO” on the Nomination of Richard Cordray
The Senate has confirmed Richard Cordray to be the director of the Consumer Financial Protection Bureau (CFPB). Created by the Dodd-Frank financial regulatory overall, the position would give Mr. Cordray nearly unchecked and unparalleled regulatory powers –contrary to the balance of powers within government – over consumer financial products and services.
By law, the CFPB had no regulatory authority until the Senate confirmed a director. Once confirmed, a director can operate with near autonomy because the bureau is housed within the Federal Reserve, its budget is not subject to congressional control and its status within the Federal Reserve precludes presidential oversight.
As the Heritage Foundation has explained, there are a number of concerns with the CFPB that have not been addressed. Additionally, Cordray’s previous unconstitutional appointment potentially makes certain actions during his past year as director illegitimate.
The guidelines for CFPB’s enforcement methods are vague. Specifically, the bureau is empowered by statute to take action against “unfair, deceptive, and abusive practices” in financial products and services. But Dodd-Frank is particularly vague on the definition of “abusive.” This concern was not sufficiently addressed during Cordray’s Senate testimony.
Finally, the bureau is also empowered to indentify “risk” to consumers. Again, there is no definition of risk in the relevant title, meaning the reach of the bureau is extremely broad.
Heritage Action has opposed the nomination of Richard Cordray in the past and will include it as a key vote in our scorecard.