What it to become of the CFPB?

by Sarah Grotta 0

One of the favorite guessing games in Washington seems to have been speculating on Richard Cordray’s next career move.  Would he step down, allow his term to run out or get fired by President Trump?  Now that Cordray has announced he will leave the bureau at the end of the month, the speculation game has turned to predictions about Cordray’s next move and what will become of the Consumer Financial Protection Bureau (CFPB) now that he has left.  Bloomberg’s article on the topic suggests that a temporary leader, currently thought likely to be Mick Mulvany, will be put in place initially until the bureau’s long-term fate is determined:

Mick Mulvaney once called the Consumer Financial Protection Bureau “a sad, sick joke.” Now, he may get to oversee Elizabeth Warren’s favorite regulator.

Mulvaney, President Donald Trump’s Office of Management and Budget director, is being considered for a temporary role as interim director of the consumer watchdog after Richard Cordray steps down later this month, according to two people familiar with the matter. Mulvaney would be expected to name someone else or a team of people to run the CFPB on a day-to-day-basis so he could keep his focus on OMB, said one of the people.

Given the temporary status of the new director – Mulvany or someone else –there could be a slowdown in initiatives and possibly a delay of rules yet to take effect.  But it would be a risky bet for those in industries preparing for new, pending rules to stop now.  There is still much to be determined:

An interim director could immediately change the tone at the CFPB by making it more friendly to banks, halting work on unfinished regulations and slowing down rules that haven’t yet taken effect.

A temporary head could also have a major impact on the CFPB’s oversight of specific companies. Investigations into wrongdoing might be shut down and supervisory exams could be less intrusive.

Overview by Sarah Grotta, Director, Debit Advisory Group

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