Turnover at the top of a consumer finance watchdog agency could set off major regulatory shifts for banks and other financial firms.
On Nov. 15, CFPB director Richard Cordray announced he was stepping down at the end of the month. Known for his aggressive stance in enforcing consumer protection laws and promulgating consumer finance regulations, Cordray leaves the CFPB under fire as President Donald Trump prepares to name an interim director who will likely take the agency in a completely different direction. Consumer finance companies will likely see less stringent enforcement and rulemaking from the CFPB in the near future, and different scenarios may unfold as it changes leadership.
The CFPB, established in 2010 by the Dodd-Frank Wall Street and Consumer Protection Act, is tasked with regulating the consumer finance industry and enforcing consumer protection statutes such as the Fair Credit Reporting Act and the Fair Debt Collection Practices Act. It has promulgated rules such as one banning consumer finance companies from using arbitration clauses to block class action lawsuits. The GOP-controlled Congress voted to nullify that rule late last month, however.