Ex-CFPB director urges agency to ‘act immediately’ to help consumers during pandemic

Former Consumer Financial Protection Bureau (CFBP) Director Richard Cordray on Monday outlined a number of steps that the agency should promptly take to help consumers during the coronavirus pandemic.

In a white paper posted on Medium, Cordray and two other former CFPB officials argued that the agency currently “has been proceeding as if it is oblivious of the new and urgent risks facing consumers.”

“It is relaxing various duties for financial companies and continuing to push the industry to comment on regulatory initiatives at a time when the focus needs to be placed on the grave economic hardship now confronting millions of Americans,” the former CFPB officials wrote. They added that the agency “has the legal authority needed to take urgent steps to prevent many consumers from sliding off the financial cliff.”

Cordray, who served as the CFPB’s first director from 2012 to 2017 and was appointed by former President Obama, said that a top priority for the agency should be to learn about what’s happening in consumers’ lives and what help they need.

“For example, the CFPB has a first-class consumer complaint response system that provides real-time information from consumers all over the country on what is happening in their lives,” he and his former colleagues wrote. “The CFPB should use it to learn from consumers what exactly is happening and make the answers publicly available.”

Cordray also said that the agency should help prevent people from being evicted or have their homes foreclosed on. He and the other former CFPB officials said that the the agency should monitor banks to make sure they provide the foreclosure relief authorized in the new $2 trillion coronavirus relief law, inform people about restrictions on evictions that state officials have imposed, and monitor mortgage servicers.

Additionally, Cordray urged the CFPB to issue guidance aimed at preventing debt collectors from engaging in abusive behavior, police companies that repossess cars, and work with other federal and state agencies to police coronavirus-related scams.

“The economic crisis emerging in this country creates enormous and unavoidable problems and risks for many consumers,” Cordray and his former colleagues wrote. “It is in difficult times that strong consumer protections are needed the most. The CFPB is well positioned to make a difference for large numbers of Americans, but it must confront the circumstances and act immediately to mitigate the harmful effects of this crisis.”  

The white paper was addressed to current CFBP Director Kathleen Kraninger and the leaders of House Financial Services Committee and the Senate Banking Committee.

A CFPB spokesman did not immediately respond to a request for comment.

Sen. Elizabeth Warren (D-Mass.), who designed the CFPB, highlighted Cordray’s paper on Twitter.

“He’s right: the consumer agency has an important role to play during this economic crisis to protect working families, but @CFPBDirector Kraninger must stop letting the banking industry drive the agency’s agenda,” Warren tweeted.

Read this important thread from former @CFPB Director @RichCordray. He’s right: the consumer agency has an important role to play during this economic crisis to protect working families, but @CFPBDirector Kraninger must stop letting the banking industry drive the agency’s agenda. https://t.co/3FFVm1CLEt

— Elizabeth Warren (@SenWarren) April 6, 2020