On March 3, 2015 CFPB Director Richard Cordray appeared before the House Committee on Financial Services to deliver testimony regarding the Bureau’s work. Director Cordray spent much of his semiannual address touting the Bureau’s efforts in the mortgage space. In his written statement, Director Cordray commented on the Bureau’s Qualified Mortgage rule—which implemented ability-to-repay standards—as well as its proposed rural lending rule amendments—which increase the number of financial institutions that qualify as “small creditors” under Regulation Z. Additionally, Director Cordray noted that the Bureau’s enforcement actions have led to orders totaling $5.3 billion since the inception of the CFPB; $1.6 billion of that has come since the Bureau’s last semiannual report. Director Cordray noted that these penalties stem from actions in a variety of industries – including credit cards, mortgage lending, and debt collection. He reported that the CFPB has received 540,000 complaints from consumers since its inception.
During his testimony, Director Cordray addressed questions about a number of the Bureau’s initiatives. Chairman Hensarling asked the Director to comment on the Bureau’s Qualified Mortgage rule, citing a Federal Reserve study that showed one in five individuals would not be able to obtain a mortgage under the CFPB’s ability-to-repay standards. Director Cordray responded that the concerns raised in the report were legitimate, and that the Bureau opted to adopt a different rule as a result. He added that the CFPB had instead adopted a rule that was “more generous to mortgage lenders.” Chairman Hensarling also asked about the Bureau’s potential regulation of payday lending. In response to a question about what specific failures the Bureau hoped to address, Director Cordray responded that the Bureau merely hoped to address what it saw as an overall market issue.
Additionally, Director Cordray fielded questions about the Bureau’s upcoming prepaid card rules. Representative Neugebauer asked how the Bureau plans to balance high demand for prepaid cards with regulation of certain features, such as overdraft protection. Director Cordray noted that the comment period on the proposed rule is open until the end of the month, but that the Bureau’s primary focus was creating a rule that extends to prepaid cards the protections generally afforded traditional credit cards.
Director Cordray also fielded questions on a number of other issues including for-profit education, overdraft fees, and credit-application data. Director Cordray’s prepared remarks are available here. Archived video of his testimony is available here.