NEW YORK >> Richard Cordray, the aggressive first director of the Consumer Financial Protection Bureau, said today he will leave the agency by the end of the month.
Corday was a holdover from the Obama administration, appointed to his position in 2013 for a five-year term. His early resignation will give President Donald Trump a chance to appoint his own leader of the powerful agency, someone who could roll back the protections Cordray and his staff put into place in the agency’s first years.
Cordray’s resignation is not unexpected. The Ohio native had been widely expected to make a run for governor of his home state in 2018 as a Democrat. He could not hold his position as director of the CFPB and run at the same time.
“It has been a joy of my life to have the opportunity to serve our country as the first director of the Consumer Bureau,” Cordray said in a memo addressed to agency employees. He did not give a reason for his resignation.
The CFPB as part of the laws passed following the 2008 financial crisis and subsequent recession. The agency was given a broad mandate to be a watchdog for consumers when they deal with banks, credit card, student loan and mortgage companies, as well as debt collectors and payday lenders. Nearly every American who deals with banks or a credit card company or mortgage has been impacted by new rules the agency put in place.
The CFPB gets its funding from the Federal Reserve and its director is given significant leverage to go after what he or she considers important and cannot be removed from the position except for wrongdoing.
Cordray aggressively enforced his mandate as the first director. The bureau implemented or proposed a myriad of new rules and regulations for the banking industry, which oftentimes made him a target for the industry’s Washington lobbyists and Congressional Republicans who believed Cordray was overreaching in his role, calling the CFPB a “rogue agency.” Some Congressional Republicans had urged President Trump to fire Cordray.
While Cordray was able to implement many new regulations on banks, credit card companies and debt collectors, he also lost some notable battles. The GOP-led Congress recently overturned a new CFPB regulation that would have allowed banking customers to ban together to sue their banks in a class action. Another rule, aimed at regulating the payday lending industry, also faces a potential veto from Congress.
Cordray was not Obama’s first choice for the newly created agency. That person was now Senator Elizabeth Warren, D-Massachusetts, who had proposed the agency in her previous job at Harvard Law School. But Warren, who was an outspoken critic of Wall Street — as she is now — never made it through Senate confirmation.
“(Cordray) is a dedicated public servant and a tireless watchdog for American consumers – and he will be missed,” Warren said in a statement.
Based on Trump’s previous appointments, his choice is likely to be far friendlier to the financial industry than Cordray. A White House spokesman said Trump will choose a successor for Cordray “at the appropriate time.”