CFPB Nominee Argues that Agency has Checks & Balances

Congress has imposed numerous checks and balances on the Consumer Financial Protection Bureau’s powers, according to Richard Cordray, who has been nominated by President Obama to be the agency’s first director.

Like what you see? Click here to sign up for a National Mortgage News free trial and daily newsletter to get the latest feature stories, news headlines, data, and in-depth analysis on the issues impacting the mortgage industry.

Cordray told the Senate Banking Committee Tuesday afternoon that the Financial Stability Oversight Board can even veto and override the bureau’s rules.

But the former Ohio attorney general said such a veto would “never be necessary.”  If banking regulators on the oversight board raise concerns that a CFPB rule would threaten the safety and soundness of the banking system, “We should work toward a consensus,” he testified. 

The nominee currently serves as the chief of CFPB’s enforcement division.

Cordray also said the bureau is bound by a recent federal court ruling that requires regulators to conduct a cost-benefit analysis as part of the rulemaking process. 

The bureau “must do a careful cost-benefit assessment of any rule and not simply reach a conclusion and rationalize it after the fact,” he said.

But Cordray’s testimony did not sway Sen. Richard Shelby, R-Ala., who claims the CFPB needs structural reforms to make it more accountable to Congress and independent of the executive branch.

“All of the bureau’s power is concentrated in the hands of its director,” the Alabama senator said.  “It is staggering the amount of control the director will exert over the daily financial choices available to Americans.”  (See related story on the NMN website.)

Daily Briefing | Wednesday, September 7, 2011

  • Banks Took $6B in Reinsurance Kickbacks, Investigators Say

    Many of the country’s largest banks received $6 billion in kickbacks from mortgage insurers over the course of a decade, according to a previously undisclosed investigation by the Inspector General of the Department of Housing and Urban Development.

  • MBA: Despite Ultra Low Rates, Applications Off 5%

    Although mortgage rates continue to test new all-time lows, applications took a tumble last week, a sign that consumers continue to be spooked by uncertainty in the overall economy.

  • Should Mortgage Bankers Fear the Results of FHA Servicing Audits?

    As settlement talks continue between the states and the megabanks over the robosigning scandal, some of the nation’s largest servicers fear they may have a new item to add to their worry list: civil liability tied to the monthly processing of Federal Housing Administration loans.

  • FHFA: Investment Bankers Can’t Use ‘Sophisticated Investor’ Excuse

    The Federal Housing Finance Agency is pushing back against claims that Fannie Mae and Freddie Mac were sophisticated investors that should have done a better job of vetting their purchases of mortgage-backed securities.

  • SEC Proposal Could Hamper Revival of PLS Market

    MBS issuers have long enjoyed an exemption from onerous provisions of the Investment Company Act since the start of mortgage securitization in the early 1980s, but all that could change under a new proposal being weighed by the Securities and Exchange Commission.

  • Bad Housing Market Causing ‘Dirt Bond District’ Bankruptcies

    Some struggling development districts around Omaha have turned to Chapter 9 bankruptcy as a way to restructure debt as they wait out an ailing housing market.

  • Former Clayton Executive Hired by Collingwood

    The Collingwood Group Wednesday announced that it has hired industry veteran Tom Cronin as a managing director of the firm.

  • Pennsylvania HFA Readies $81M of Single-Family Bonds

    The Pennsylvania Housing Finance Agency is scheduled to sell $81.4 million of single-family mortgage revenue bonds on Thursday after a one-day retail period.

  • Mortgage Broker Charged In $5 Million Paragon FCU Loan Scheme

    A New Jersey mortgage broker has been charged with submitting false information to qualify for 13 multifamily loans with the help of a loan coordinator at Paragon Federal Credit Union, Montvale, N.J.

Article source: http://www.nationalmortgagenews.com/dailybriefing/2010_426/cfpb-nom-agency-checks-balances-1026458-1.html

Leave a Reply

WP2FB Auto Publish Powered By : XYZScripts.com
Bunk Beds