Richard Cordray and the Bureau of Consumer Financial Protection

A Solid Foundation

NY Times Article: 

http://topics.nytimes.com/top/reference/timestopics/organizations/c/consumer_financial_protection_bureau/index.html?inline=nyt-org

On January 4, 2012, US president Obama appointed Richard Cordray to head the Bureau of Consumer Financial Protection in a semi-recess appointment. While the way in which the appointment was undertaken was quite controversial given prior opposition to his appointment by senate republicans, the real news, what’s really remarkable, is what the agency stands for and hopes to achieve, as well as the fact the United States has allowed this agency to be without a director so long.

The BCFP is an agency which was launched in 2011 as a financial regulatory watchdog agency. While the agency’s official function is ostensibly to write and enforce bank regulations, the BCFP will also regulate non-bank financial institutions. The agency’s mission also includes the conduct of stress-testing and the handling of consumer complaints vis-à-vis fraudulent lending and financial practices.

Another remarkable aspect of the agency is its link to the Federal Reserve. Although its expenses are funded by the Federal Reserve, its operation is wholly independent. Nevertheless, Republican complaints that the BCFP is a cabal of unaccountable bureaucrats ring hollow in light of the fact that the agency answers to two committees of Congress, one from the House of Representatives and one from the Senate, as well as to the president of the United States. Furthermore, it must be said that its mission is try to bring order and accountability to the unaccountable and opaque private financial market which has developed in the US in the past few decades.

This Agency has indeed gone on too long without a director, due solely to the opposition and filibustering tactics of a minority in the US Senate, who ultimately do not have the financial market stability and transparency nor the concerns of the consumers in the financial markets at heart.

The BCFP has the potential to be a friend to both the typical American credit consumer and to the overall stability of our financial system, and it needs a capable and tough director. 

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Richard Cordray is the director of the United States Consumer Financial Protection Bureau. He was appointed by President Obama on January 4, 2012. Prior to that, he served as the Attorney General of Ohio.