Senator Cautions CFPB Chief Not to Exceed Powers and Re-write Dodd-Frank

Senator Richard Shelby, R-Alabama, grilled Consumer Financial Protection Bureau (CFPB) chief Richard Cordray about the extent of the CFPB’s powers.

Shelby contends that the bureau is “completely immune from congressional oversight,” and asked several questions about whether it has the authority to modify, or grant exemptions from, certain statutory requirements of Dodd-Frank and bypass congressional will.

Shelby rant was about a mortgage disclosure requirement in Dodd-Frank that the CFPB recently said it was considering making exempting some companies from because the form would be difficult to explain to consumers.

Sen. Shelby believes that the CFPB could simply ask Congress to amend the statute, but that’s not what he sees Cordray’s agency doing.

“Instead, the bureau has interpreted its exemptive authority so broadly that it believes it can just ignore the statute,” Shelby said. “After all, if the bureau can easily ignore a statute, it raises the more serious question of whether Congress or the bureau has the final say over what the law is.”

For his part, Cordray sought to defuse the matter as best he could.

“I absolutely do not think we can rewrite statutes,” Cordray said. “I will say, interestingly enough, there are many requests for us to consider our exemption or modification authority… but we do not believe we have the authority to ignore or rewrite the law.”

At the hearing, Cordray described how the bureau has responded to the 72,297 complaints it had received from consumers as of Sept. 3. At that rate, the CFPB is expected to field 120,000 consumer complaints a year, the majority of them on mortgage lending and servicing.

“The volume of complaints we’re receiving is heavy, and it’s hard work to keep up with it,” Cordray said.

This is a big election coming for the CFPB and the Dodd-Frank act. What do you think should be done with the CFPB?