WASHINGTON — A House Financial Services Committee report sharply criticizing the Consumer Financial Protection Bureau’s handling of the Wells Fargo phony-accounts scandal was biased and left out key information, according to Richard Cordray, the agency’s director.
In a letter to panel Chairman Jeb Hensarling, R-Texas, Cordray attempted to rebut the Republican majority staff report, which had called for him to possibly be held in contempt for failure to properly comply with the committee’s investigation.
Cordray detailed the CFPB’s efforts to provide information with the committee, claiming that the panel’s report left out key details.
“The staff report selectively mentions only some of the communications between the Committee and the Consumer Bureau,” Cordray wrote.
The committee’s GOP staff released a 15-page report two weeks ago that concluded that Cordray lied to Congress when he told the committee during an April hearing that his agency’s investigation was “independent and comprehensive.” It also accused the CFPB of withholding key documents.
But Cordray said neither of those claims is true. In the first case, he said, the disagreement “seems to stem from differing interpretation of the terms ‘independent’ and ‘comprehensive.’ “
“As I see it, the Consumer Bureau worked with the Los Angeles City Attorney office and the OCC to ascertain the facts and resolve the issues. So we were not operating ‘independently’ in the sense that we operate in other cases where we are the lone government agency involved,” Cordray said. “We had an obligation to make our own independent judgement about the underlying facts and whether they could be sufficiently verified and commended for purposed of either filing a complaint or framing an order. We did that.”
Cordray also says that the report ignores the outcome of the $190 million settlement that was reached with Wells and that the illegal sales practices started in 2001, well before the CFPB was created in 2011 and fully staffed in 2014.
The report instead “devolves into various misstatements and allegations about the extent of the Consumer Bureau’s cooperation with Committee’s investigation,” Cordray said.
Moreover, Cordray disputes the committee’s contention that the CFPB has turned over only roughly 1,000 pages of material, while the bank has provided it with 140,000 pages of records. Cordray said the bureau has provided more than 57,000 pages of materials related to the investigation and has repeatedly sought more guidance from the panel on what other information it is seeking.
“In the end, I am quite proud of the CFPB team that has been working on Wells Fargo matters,” he said.
He concluded by saying he “will continue to seek ways to cooperate with your oversight requests and to work toward an amicable resolution of any disagreements.”
Rep. Maxine Waters of California, the top Democrat on the panel, blasted Hensarling and his staff for their report.
“Republicans have been clamoring to weaken, impede, and ultimately destroy the Consumer Bureau since its creation,” Waters said. “The Consumer Bureau charged Wells Fargo with a record $100 million fine for opening fake accounts and yet, committee Republicans haven’t done anything to hold Wells Fargo accountable. This report is an insult to the millions of Americans who were harmed by Wells Fargo.”
However, Jeff Emerson, a spokesman for Hensarling, said, “Director Cordray’s response indicates he has different definitions for ‘independent,’ ‘comprehensive’ and ‘supervisory activity’ than everyone else.”
“The facts are clear: Documents produced by the OCC contradict Director Cordray’s testimony. This calls into question whether Director Cordray misled Congress,” he said.