On November 15th, the head of the Consumer Financial Protection Bureau (CFPB), Richard Cordray, announced that he will be stepping down from his role by the end of November. Georgia credit unions who attended the joint GCUA board meeting on November 7th heard this was looming on the horizon from Elizabeth Eugubian, Deputy Chief Advocacy Officer & Senior Counsel/Regulatory Affairs for CUNA, and credit unions in general have been vocal in their objections to Congress about the expansive reach of the agency and how it impacts the industry’s ability to serve members. Mick Mulvaney, the previous White House budget director, is widely expected to be named by President Trump to serve as an interim director after Cordray’s departure.
What this could mean for credit unions:
- The CFPB, created in 2011 in response to the financial crisis of 2007-08, has significant authority over credit unions and other businesses. And while the CFPB was originally directed at Wall Street, its regulatory power has added to the burdens felt at credit unions. Its structure and its authority have come under fire often in Congress. But the agency is not likely to be abolished.
- However, with any change in leadership, the direction and focus of the agency could change, and one thing is certain … the direction will be different. Cordray has been described as an active watchdog who was seen as some as a champion of the public, and by some as pursuing overaggressive policing of highly regulated entities. Mulvaney has been an outspoken critic of the CFPB’s actions and focus, and while the new leader won’t handle the day-to-day operations, he will set the tone and direction for the agency. One should expect a different CFPB.
- The White House is seeking to remake the bureau to ease regulation on banking and business, and Cordray’s exit also opens the door for a possible complete restructure of the CFPB. Credit unions have lobbied Congress on the need for a multi-individual leadership structure for the CFPB as opposed to a sole position (such as with the NCUA Board), and this change in leadership may be the first step towards a restructure.
