CFPB Director Cordray Testifies Before Senate Banking Committee; Session Was Mostly Partisan Posturing

Consumer Financial Protection Bureau (CFPB) Director Richard Cordray testified before the Republican controlled Senate Banking Committee yesterday. The purpose of the hearing was ostensibly to discuss the Bureau’s 7^th semi-annual report. insideARM (summarized that report on June 18th.)

Committee Chairman Richard Shelby (R-AL) opening remarks highlighted the Republican concern over the CFPB’s lack of accountability and transparency. Shelby also expressed concern over the bureau exceeding their intended scope of authority by recent activity in the telecom and auto finance arenas. Finally, Shelby commented on the increased size of the agency (now over 1400 employees) and the rising cost of the renovation of the CFPB’s headquarters. Shelby noted that The Federal Reserve Inspector General had estimated the cost of actual renovation has increased from $40 million in February of 2012 to $145 million in December of 2013. That amount is over three-and-a-half times the initial estimate. Shelby also stated that the Inspector General estimated that the total cost is now closer to $216 million.

Director Cordray’s opening statement provided highlights covered in the semi-annual report and covered no new ground.

The Q&A portion of the hearing went far beyond the scope of the semi-annual report and highlighted the partisan differences between the Republican and Democratic views on the CFPB. Highlights include:

Ranking committee member Sherrod Brown (D-OH) offered a vigorous defense of the CFPB and argued against any potential congressional attempt to limit its authority.

Sen. Mike Crapo (R-ID) and Sen David Vitter (R-LA) expressed concern over the vast amount of consumer data that is being collected by the CFPB, particularly in light of the recent breaches of government computers.

Sen. Elizabeth Warren (D-MA) offered her support of the CFPB’s consumer complaint database. The complaint portal provides a place for people to submit and have published complaints about companies. That complaint database is very controversial in light of the fact that the complaints are published without any verification.

A video archive of the full hearing is available here.

insideARM Perspective

The hearing provided no new information and served mainly as an opportunity for the members to publicly voice partisan views on the Bureau.