Consumer Financial Protection Bureau's Cordray to step down
Richard Cordray said he's resigning as the director of the Consumer Financial Protection Bureau, with plans to leave the office by the end of November.
An appointee of former President Barack Obama, Cordray is expected to return to his home state of Ohio to run for governor. The Democrat has been a leading critic of President Donald Trump within the government.
The brainchild of Massachusetts Senator Elizabeth Warren, the CFPB established rules for the mortgage industry and payday lenders, among others. It also created a clearinghouse for consumer complaints and returned millions of dollars in payments to consumers harmed by financial institutions. Some Republicans have sought to curb its power, criticizing the bureau for overreaching.
"We believe this will complete the Team Trump take over of the regulatory agencies," wrote Cowen analyst Jaret Seiberg in a research note on Wednesday afternoon. "It should mean by summer there are Republicans running all of the banking agencies."
Seiberg added he believes Cordray's departure will be "broadly positive for financial firms involved in retail banking."
"There should be less focus on technical violations and more on actual consumer harm," he wrote. "This could convince lenders to take more risk and it could result in relief for loan servicers and debt collectors."
Cordray "will be missed," Sen. Warren said in a statement.
Warren added, "The new director of the CFPB must be someone with a track record of protecting consumers and holding financial firms responsible when they cheat people. This is no place for another Trump-appointed industry hack."
In a note to CFPB staff announcing his departure, Cordray touched on the highlights of the bureau's efforts since its 2011 creation.
"Together we have made a real and lasting difference that has improved people's lives, notably: $12 billion in relief recovered for nearly 30 million consumers," Cordray said in the email.
He said other accomplishments of the watchdog included "stronger safeguards against irresponsible mortgage practices that caused the financial crisis and hurt millions of Americans; giving people a voice by handling over 1.3 million complaints that led to problems getting fixed for vast numbers of individuals, and creating new ways to bring financial education to the public so that people can take more control over their economic lives."
Cordray was the first confirmed head of the independent agency established by Dodd-Frank, the landmark banking law created after the 2008 economic crisis that was designed to prevent future meltdowns.
Some Republicans had urged Mr. Trump to fire Cordray, who was critical of Republican efforts to undermine the Dodd-Frank law. Cordray's departure gives the president an opportunity to appoint a CFPB director aligned with the Trump administration's goal of reducing financial regulations.