Hensarling: For all the harm inflicted upon consumers, Richard Cordray should be dismissed by the President
April 5, 2017 -
House Financial Services Committee Chairman Jeb Hensarling (R-TX) delivered the following opening statement at a hearing with Consumer Financial Protection Bureau (CFPB) Director Richard Cordray:
Today we receive the testimony of Mr. Richard Cordray as he presents again the semi-annual report of the CFPB.
Mr. Cordray, I know that you are here at our committee’s invitation for a statutory appearance, but I’m otherwise surprised to see you here in that, as you well know, there have been many press reports saying that you would have otherwise returned to Ohio to pursue a gubernatorial bid. Perhaps the rumors of your political aspirations are greatly exaggerated.
On the other hand, I am also surprised that you are here because, as you are well aware, the President under the PHH case can dismiss you at will. Under Dodd-Frank, you can be removed for cause. Either way, I believe the President is clearly justified in dismissing you and I call upon the President – yet again – to do just that, and to do it immediately.
There is no greater form of consumer protection than fostering competitive, innovative and transparent markets and then vigorously policing them for fraud, theft and deception. In policing our markets, under Mr. Cordray’s leadership, CFPB’s success record is anything but clear.
What is clear, though, is that under Mr. Cordray’s leadership the CFPB has shown an utter disregard for protecting markets and has made credit more expensive and less available in many instances; this is particularly true for low and moderate income Americans. What is also clear is that under Mr. Cordray’s leadership, the CFPB has acted unlawfully, routinely denied market participants due process and abused its powers.
The CFPB has now finalized a rule that would reduce access to pre-paid card products, harming nearly 70 million consumers who do not or cannot use traditional banking services. Thanks in part to CFPB’s oversight, credit card rates have risen significantly with many would-be borrowers being priced out of the market entirely. Many credit-worthy borrowers could pay almost $600 more for their auto loans due to CFPB’s indirect auto lending guidance.
According to researchers at the University of Maryland, as a result of Dodd-Frank and the CFPB, middle-income borrowers not only “didn’t obtain cheaper mortgages, but were cut out of the mortgage market altogether.”
For all the harm inflicted upon consumers, Richard Cordray should be dismissed by the President.
Next, in CFPB’s short six-year history, the record is replete with instances where it has abused or exceeded its statutory authority.
In the PHH case where the CFPB’s structure was ruled unconstitutional, the facts show that Mr. Cordray unilaterally reversed accepted law with regards to Section 8(c) of RESPA, and did so not with formal rulemaking – that is, with notice, comment and due process – but with an ad hoc enforcement action instead.
Then, to make matters worse, Mr. Cordray attempted to apply this new, rogue standard retroactively. The D.C. Circuit Court ruled against him in both instances.
On March 31, 2013, CFPB issued Bulletin 2013-2, attempting to impose control over dealer indirect auto lending compensation. In doing so, CFPB sought to illegally regulate companies over which it has no statutory authority and which, in fact, are expressly exempt under the Dodd-Frank Law. CFPB then failed to afford due process to regulated companies under the Administrative Procedures Act.
For conducting unlawful activities, abusing his authority and denying market participants due process, Richard Cordray should be dismissed by our President.
Not only must Mr. Cordray go, but this current CFPB must go as well.
American consumers need competitive markets and a “cop on the beat” to protect them from fraud and deception. They don’t need Washington elites trampling on their freedom of choice and picking their financial products for them.
Today, Mr. Cordray and his CFPB don’t just act as a cop on the beat, they act as legislator, prosecutor, judge and jury all rolled into one.
The CFPB represents the summit of unelected, unaccountable and unconstitutional agency government. It represents a dagger aimed at the heart of our foundational principles, namely co-equal branches of government, checks and balances, due process and justice for all.
Clearly you can be a Democrat – upper case D – and believe in the CFPB, but you cannot be a democrat – lower case D – and believe in this institution.
Thus, this debate has import way beyond the fate of fines, credit cards and mortgage access. It represents nothing less than one of the key battles to defend and protect our Constitution. As James Madison wrote in Federalist 47, “the combination of all power, legislative, executive and judiciary…may justly be pronounced the very definition of tyranny.”
This tyranny must end and the people’s constitutional rights returned to them.