Consumer agency director resigns, names acting successor
Richard Cordray, the first director of the Consumer Financial Protection Bureau, resigned Friday and simultaneously named his own successor, setting up the consumer agency for another battle with the Trump White House over control of the powerful federal watchdog.
Cordray had announced earlier this month that he would resign by the end of this month. There is wide speculation that Cordray, a Democrat, is resigning in order to run for governor of Ohio, his home state.
On the same day that Cordray announced his resignation, he also elevated Leandra English, who was the agency’s chief of staff, into the deputy director position. With Cordray’s resignation, English would become acting director.
By naming English as deputy director, Cordray, an Obama appointee, sets up a fight with the Trump White House, who wanted to assign its own acting director of the CFPB.
The CFPB Director position requires confirmation by the Senate, and it could be many weeks or months before he or she is able to step into his or her role as director. While likely to be fought by those opposed to Cordray and the CFPB, Cordray’s move allows his favored successor to keep running the agency for as long as possible before a Trump appointee is able to take over.
The CFPB was created as part of the laws passed following the 2008 financial crisis and subsequent recession. The agency was given a broad mandate to be a watchdog for consumers when they deal with banks, credit card, student loan and mortgage companies, as well as debt collectors and payday lenders. Nearly every American who deals with banks or a credit card company or has a mortgage has been impacted by new rules the agency put in place.
Cordray used that mandate aggressively as its first director, which often made him a target for the banking industry’s Washington lobbyists and Congressional Republicans who believed Cordray was overreaching in his role, calling the CFPB a “rogue agency.”
As director, he also was able to extract billions of dollars in settlements from banks, debt collectors and other financial services companies for wrongdoing. When Wells Fargo was found to have opened millions of phony accounts for its customers, the CFPB fined the bank $100 million, the agency’s largest penalty to date.