SubPrime Auto Finance News Correspondent
It was reported by CNBC and other news outlets early Wednesday afternoon that director of the Consumer Financial Protection Bureau Richard Cordray would be stepping down from his position by the end of the month.
The news first surfaced in an email sent out by Cordray himself, announcing his plans. This new comes just a few weeks after President Trump signed H.J. Res. 111, which nullifies the Consumer Financial Protection Bureau's rule prohibiting the use of a pre-dispute arbitration agreement to prevent a consumer from filing or participating in certain class action suits.
Today, CFPB Director Richard Cordray sent an email to all CFPB staff announcing his plans to step down. When SubPrime Auto Finance News reached out to the CFPB on Wednesday, representatives said they did not have further comment at this time.
In the email written to his colleagues, Richard Cordray said, "I wanted to share with each of you directly what I have told the senior leadership in the past few days, which is that I expect to step down from my position here before the end of the month."
He went on to share that it has been the "joy" of his life to have the opportunity to serve as the first director of the CFPB.
"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," Cordray said.
That said, he made a note of pointing out that more work still lies ahead.
Immediately after the news broke, statements from finance associations started surfacing, as well. The American Financial Services Association (AFSA) was one of the first.
“While not always agreeing with Director Cordray’s decisions and rationale for those decisions, we wish him well in his future endeavors,” Chris Stinebert, president and chief executive officer of AFSA, said. ““We appreciate his dedication to the interests and the protection of consumers. Unfortunately, his decisions were not always completely developed and created undue burden on consumers’ access to credit, which curtailed lending to the consumer that the Bureau is mandated to protect.”
AFSA said it “looks forward to working with Cordray’s successor in the protection of consumers and providing safe, affordable access to credit in communities across the United States.”
Mayer Brown Consumer Financial Services partner and former CFPB official Ori Lev also released a statement shortly after the news broke, noting that while he also didn’t always agree with Cordray’s “aggressive enforcement approach,” the public servent “worked tirelessly” on behalf of America’s consumers.
Consumer watchdog group Allied Progress responded to the news of Cordray resigning from the CFPB later this month with an air of wariness towards President Trump’s process as he chooses a replacement for Cordray.
Allied Progress executive director Karl Frisch had this to say: “The CFPB’s mission has never been about one person or one administration. Its statutory mission is to protect consumers from the type of reckless practices that led to the economic collapse of 2008. That’s why a vast majority of Americans from across the political spectrum support the CFPB and the important work it does to protect them from the worst practices of big banks, credit card companies and other financial predators.
“Moving forward, President Trump will have the opportunity to nominate a new director. He has a choice. Will he pick a champion of consumers in the mold of Richard Cordray or a champion of big banks and Wall Street? His rumored short list is not encouraging. That’s why Allied Progress will fight to ensure that the next director follows the law and continues to hold powerful financial institutions accountable for fraudulent activities and abusive practices,” Frisch concluded.
As for what’s in store for the future, according to Lev, of Mayer Brown Consumer Financial Services, we will just have to wait and see.
“It is unlikely that today’s announcement will have any immediate impact on pending CFPB litigation. Once a new director is named by President Trump – either on an acting basis under the Federal Vacancies Reform Act or on a permanent basis after Senate confirmation – the new director may review pending litigation to determine if he or she wishes to continue to take the same legal positions the agency has been taking,” he said.
“It wouldn’t be surprising if the agency backed off some of its more aggressive legal positions. In the interim, defendants in such cases will likely seek to delay proceedings pending new CFPB leadership," Lev concluded.
Stay tuned to further coverage from SubPrime Auto Finance News as this news develops.