As though the news cycle weren’t frenzied enough: Consumer Financial Protection Bureau Director Richard Cordray has announced his impending departure from the bureau.
No, Cordray wasn’t fired by President Trump, and no, he wasn’t ousted as a result of a Congressional decision. The director appears to be leaving the CFPB on his own volition.
In an email to employees, Cordray announced that his resignation would be effective before the end of the month, and expressed pride and gratitude over the bureau’s accomplishments during his tenure:
As I have said many times, but feel just as much today as I ever have, it has been a joy of my life to have the opportunity to serve our country as the first director of the Consumer Bureau by working alongside all of you here. 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; 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.
President Obama appointed Cordray to lead the CFPB in 2011, a year after the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act authorized the creation of the agency. During his years as director, Cordray earned strong support as well as staunch disapproval for his decisions, which have benefited consumers but widely encumbered financial services organizations.
In recent months, following Trump’s election victory, the CFPB has faced mounting pressure from Republicans and financial services industry advocates, who feel that the bureau—and Cordray himself—wields too much unchecked authority over lenders.
And depending on where those lawmakers take the CFPB, Cordray’s tenure may wind up being a historical anomaly: if Congress restructures the bureau as a bipartisan commission, Cordray may have the distinction of being only one of a couple people to lead the CFPB as a single, unsupervised director.
What happens next? According to an American Financial Services Association bulletin:
There are two possible situations for replacement. The first is that Director Cordray could appoint Acting Deputy Director David Silberman as Deputy Director. Then, upon Cordray’s departure, Silberman could assume the role of Acting Director of the Bureau until a new Director is confirmed by the Senate.
Alternatively, the administration could appoint an acting director until a replacement can be confirmed.
As for Cordray himself, analysts say he could be considering a run for Governor of Ohio.
As we’ve said many times before, regardless of the CFPB’s stability, your best bet is to develop a solid compliance management system. Lots of regulators are happy to step in and take over where the CFPB leaves off.
This is an evolving story, of course. We’ll be sure to update you with further details as they come in. In the meantime, you can find all of our CFPB coverage, guidance, and resources here.