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Lawsuit Seeks To Settle Who Heads Consumer Financial Protection Bureau


There may be some confusion today at the Consumer Financial Protection Bureau because, technically, there are two bosses at the agency. Some background first - the CFPB is the federal watchdog agency formed in the aftermath of the 2008 Wall Street collapse. It's charged with safeguarding consumer rights and consumer rights pertaining to the financial sector. The bureau's director until last Friday was Richard Cordray. He named his No. 2, Leandra English, as the person to take over the agency when he left. The problem is the White House appointed their own interim director, naming OMB director Mick Mulvaney to the job.

Yesterday, English went to the court to challenge the Trump administration's decision. With us now is the former CFPB director, Richard Cordray. Thank you so much for being with us.

RICHARD CORDRAY: Good morning, Rachel.

MARTIN: It's an understatement, I think, to say you've been at odds with the Trump administration. You have now appointed your own temporary successor, Leandra English. Why shouldn't the White House be able to name the person who's going to lead this federal agency?

CORDRAY: Well, I think the natural and important thing to do here is to follow the statute that created the Consumer Bureau in the first place. The statute says, in particular and very specifically, that Congress should establish the position of deputy director who shall be appointed by the director - that's what I did - and shall serve as acting director in the absence or unavailability of the director. I have resigned. I'm no longer available. And therefore, the vacancy should be controlled by this statute that governs this particular agency, not a general law that governs many other agencies.

MARTIN: Although, your own bureau or the bureau you used to lead says you're wrong. The lawyers at CFPB are siding with the White House on this.

CORDRAY: Well, there's lots of lawyers who have looked at this issue, and they say two things. The first is they all acknowledge this is a hard issue. And it's not easy to know what the answer is because there's two congressional enactments that seem to speak very differently to the point at hand. Then other people have many different points of view. They disagree with one another. That's exactly the kind of situation that should be sorted out in the courts. And I'm glad that it's going to the courts because judges should decide it. Lawyers have their viewpoints, but only judges can decide it conclusively.

MARTIN: So the reason that your leadership in the past year has been so beset by partisan rancor is that the administration and Republicans in Congress - many argue the CFPB has cost consumers by forcing banks to comply with cumbersome or just outright unnecessary regulations. I imagine you disagree with that. Why?

CORDRAY: Well, I saw that President Trump tweeted yesterday that we have devastated the banks. Now, the banks made record profits last year, over $171 billion. And they're on track to make even higher record profits this year. So I don't know what devastating them means. And I'd be interested in having more explanation on that point.

MARTIN: What difference do you think the agency has made for consumers then?

CORDRAY: I think what the agency has done is it has been an enforcer, a referee to reinforce rules of the road even-handedly in all institutions, not just banks but other large financial companies that compete against them. That should be a level playing field, and we've worked to accomplish that.

We've also enforce the law. And it's really important, Rachel, that institutions know that the laws will be enforced, and they have to follow them. We've gotten back about $12 billion for consumers who were cheated or mistreated in various ways. We have set up a complaint hotline so that people can - instead of just wringing their hands over issues where they think they're getting treated badly, they can actually have a voice so they can get things fixed. And we've done that for many consumers. I think this has been a very important new development in the financial industry. And what it does is it makes banks and financial companies do things right. And they can do things right and still make a lot of money as the current landscape shows.

MARTIN: Let me ask you - the CFPB has been the focal point for a lot of partisanship. You yourself have been accused, though, of using your position to rail against the Trump administration as a way to bolster your own political career. You're said to be running for governor in Ohio. Is that a fair critique?

CORDRAY: So the mission of the bureau is to stand on the side of consumers and see that they're treated fairly. I think that's a pretty uncontroversial mission. It's been made controversial by some. But I think that it is an important mission. It keeps the financial companies honest. They're doing very well if they serve their customers well. And that's exactly what the consumer bureau's working with them to do.

MARTIN: Richard Cordray, former director of the Consumer Financial Protection Bureau - he resigned this past Friday. Thanks so much for your time this morning.

CORDRAY: My pleasure.

MARTIN: With me now in the studio is NPR's business editor Uri Berliner who was listening in to that conversation.

Uri, what is it about this particular agency, this bureau, that makes this leadership decision so contentious?

URI BERLINER, BYLINE: Well, as much as progressives like this bureau, Republicans really have a big problem with it. They think it is the perfect example of unchecked power in Washington. They say the CFPB isn't accountable to the White House. It's not accountable to Congress. It's not even funded by Congress like other agencies are. It's funded by the Federal Reserve. And all the power is in the hand of a single director. And the Republicans claim that as the director, Richard Cordray, took advantage of his power to go after midsized banks and small businesses - and, really, that he wound up harming consumers, not helping them. So they have a fundamental problem with the very structure of this bureau.

MARTIN: And we should note that the succession dispute is just temporary, even though there's a lawsuit. Eventually, President Trump will nominate a new permanent director.

BERLINER: Right. And we'll see if he can get one through. It has to be approved by the Senate.

MARTIN: NPR business editor Uri Berliner - thanks, Uri.

BERLINER: You're welcome. Transcript provided by NPR, Copyright NPR.