Part Two of an article about a government bureau set up in the Obama administration to protect the consumer, which has been targeted by the current administration for removal.
By STEVE EDER, JESSICA SILVER-GREENBERG and STACY COWLEY, September 2, 2017 for The New York Times
Since Mr. Trump’s election, Mr. Cordray, 58, has counseled his roughly 1,600 employees to tune out the political noise.
“I encourage you to remain focused on doing your good work on behalf of consumers,” he said, according to a script for a call with employees in late November. “Keep calm and carry on.”
Senator Elizabeth Warren
The agency was proposed by Senator Elizabeth Warren, Democrat of Massachusetts, when she was a Harvard professor, to serve as an advocate for consumers in their dealings with financial institutions. Mr. Cordray, who was working at the bureau as its enforcement chief, was made its first director in 2012 in a recess appointment by President Obama, which heightened the partisan rancor over the regulatory crackdown on Wall Street.
Financial executives and lobbyists offer mixed reviews of his tenure.
They describe Mr. Cordray as intelligent, pleasant and accessible, willing to meet with industry constituents and hear out their lobbyists. But they also consider him a “doggedly ideological” — in the words of Richard Hunt, the chief executive of the Consumer Bankers Association, a banking trade group — leader of an agency that is structured like “a dictatorship.”
“Richard Cordray has gone above and beyond to take C.E.O.s to task on things that he had no jurisdiction over,” Mr. Hunt said.
Mr. Kaplinsky, the financial services lawyer, said Mr. Cordray had stifled innovation in the industry by being too rigid. “It is one guy who calls all the shots,” he said.
Mr. Cordray said he listened to and appreciated his opponents. “Sometimes you look at the critics and say, ‘Nobody else was telling me that, but you were,’” he said in a recent interview.
While industry lobbyists are more circumspect, they, too, are eager to remake the bureau. Some in the banking industry would like it to disappear, but others would prefer simply to reduce its autonomy.
“I hope we’ll rebalance the pendulum in a way that ensures honest market participants have clear rules,” said David Hirschmann, who heads the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness, “and those who break laws are appropriately handled through strong, vigorous enforcement.”
Mr. Cordray says the criticism is a badge of honor. He believes the bureau’s work will have lasting ramifications.
The bureau has curtailed abusive debt collection practices, reformed mortgage lending, publicized and investigated hundreds of thousands of complaints from aggrieved customers of financial institutions, and extracted nearly $12 billion for 29 million consumers in refunds and canceled debts.
This week, it began mailing out refund checks totaling $115 million to 60,000 people who had paid illegal fees to Morgan Drexen, a debt settlement company that collapsed two years ago.
The agency has also rolled out the arbitration rule, and it has been putting the finishing touches on a rule that could reshape the multibillion-dollar payday lending industry.
To be continued