After a 2-year wait and a contentious legislative battle, Richard Cordray was confirmed Tuesday as the director of the Consumer Financial Protection Bureau. The CFPB was created under the 2010 Dodd-Frank Act to regulate consumer protection in the financial services industry.
The CFPB aims to promote fair and transparent markets through education, enforcing and research. Thus far, they’ve provided resources for Americans on their consumer rights, taken complaints on financial abuses, taken enforcement actions against the abusers, and issued rules and regulations regarding credit cards, mortgages, student loans and more.
In a statement in January 2012, White House Communications Director Dan Pfeiffer called Cordray “America’s Consumer Watchdog,” entrusting him with the duty of working “on behalf of millions of families across the nation to ensure they’re not being taken advantage of by debt collectors and credit reporting agencies.” Pfeiffer also noted that Cordray will “ensure that families and students don’t get saddled with sky-high interest rates by mortgage or payday lenders.”
As the legislative stalemate of his confirmation ended, the question remains: what does his official appointment mean for the average American consumer?
Cordray’s confirmation indicates that legal issues surrounding the constitutionality of the CFPB’s actions in the interim period prior to Tuesday’s official vote are essentially vacated. This will strengthen the authority of the agency in exerting their influence over lenders and financial institutions, ultimately making the marketplace more amenable to consumer concerns with keeping interest rates low and predatory lending at bay.
Sen. Elizabeth Warren (D-Mass.) was a special adviser and key component to the establishment of the bureau as a professor at Harvard. “We now have certainty. There are no more clouds, period,” she told reporters. “This locks all the pieces in place.”
The CFPB released a statement Tuesday in which Cordray echoed Warren’s sentiment, saying, “Today’s action brings added certainty to the industries we oversee and reinforces our responsibility to stand on the side of consumers and see that they are treated fairly in the financial marketplace.”