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GOP Raises Heat on CFPB's Cordray

Douglas Graham/CQ Roll Call
Republicans on the Senate Banking Committee questioned Cordray, above, on Tuesday, but Vitter boycotted the session.

On Monday, Hensarling sent a letter to Cordray saying he would not permit the regulator to testify before the House Financial Services Committee because he has not been confirmed by the Senate.

Hensarling’s action was a striking move, and the offices of the House and Senate historians could not immediately find a precedent for such an action.

Senate Minority Leader Mitch McConnell, R-Ky., during a legislative conference of the American Bankers Association last week, told the bankers he believed the NLRB decision in Noel Canning v. NLRB could throw into question not only Cordray’s appointment but also any actions taken at the entire agency under his leadership.

But House Financial Services ranking member Maxine Waters, D-Calif., on Tuesday challenged Hensarling’s decision not to permit Cordray to testify.

“As you conceded in your correspondence with the CFPB, no court has addressed the legitimacy of the president’s appointment of Director Cordray,” Waters wrote. “If you chose to continue to ignore the law, then I am prepared to use the rules of the committee to provide the director the opportunity to give testimony before the Committee.”

During the Senate hearing, which proceeded in a relatively undramatic fashion, Cordray told the panel that his semiannual report included some of the bureau’s first enforcement actions taken against credit card companies that “deceived and misled consumers.” He told the lawmakers the bureau had secured $425 million for some 6 million consumers and had imposed penalties on the industry.

“These actions will serve as a warning signal for anyone who seeks to profit by deceiving or misleading consumers,” he said.

Many of the Republicans’ questions focused on reports of data collection. Cordray said his agency is trying to keep up with the financial industry’s own data collection and that the CFPB could not adequately do its job of reporting its work to Congress or monitoring consumer trends without collecting information. He also noted that the CFPB does not reveal private information about consumers and instead uses “anonymized” data.

“The big banks know more about you than you know about yourself,” he said.

Crapo questioned whether the federal government should “now be getting in a big way into the kind of data collection that you’re talking about.” Ultimately, Cordray and Crapo agreed to have their staffs further examine how the data is retrieved and stored.

Other members, too, told the CFPB director that they found the data collection a cause for concern.

“To many people, this is going to sound downright creepy,” Johanns told Cordray.

Cordray also defended his agency’s work to make public consumer complaints against financial institutions. “This is information that is illuminating to us as we go about doing our work,” he said.

Democratic Sens. Sherrod Brown of Ohio and Elizabeth Warren of Massachusetts, who advocated for formation of the agency before she was elected to the Senate last year, said the GOP filibuster threat against Cordray was aimed at holding the agency “hostage.”

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