Richard Cordray will quit his job as director of the Consumer Financial Protection Bureau (CFPB) by Nov. 30. Speculation is that Cordray plans to run for governor of Ohio, his home state. NADA President Peter Welch left no doubt that dealers will not miss him.
“Cordray’s tenure as CFPB director has been marked by a number of ill-fated attempts to stymie consumer benefits of free market competition, including the CFPB’s attempt to eliminate the ability of auto dealers to discount interest rates for the benefit of their customers,” Welch said in a statement.
The American Financial Services Association (AFSA), which represents automaker captives and other large lenders, offered its own statement about Cordray: “Unfortunately, his decisions were not always completely developed and created undue burdens on consumers’ access to credit that the Bureau is mandated to protect,” said CEO Chris Stinebert.
A report in the Washington Post said that President Trump may appoint Office of Management and Budget Director Mick Mulvaney as interim head of the agency. Mulvaney has criticized the CFPB’s independence and lack of accountability in the past.
Republicans in Congress have attacked the CFPB on the same grounds. Created under the Dodd-Frank Finance Reform Law passed in 2010 to rein in Wall Street after the financial meltdown, the CFPB is unique among federal agencies in having a director who can only be fired by the president for cause. The agency gets its money from the Federal Reserve and does not depend on Congress for funding.
Although the CFPB is specifically barred from regulating dealers, many in the automotive community believe the agency often overstepped its regulatory bounds. The most recent example was a CFPB rule requiring lenders under its jurisdiction – dealers’ finance and lease sources – to put a clause in their consumer contracts banning mandatory arbitration in consumer disputes. Congress overturned the rule last month, thanks in part to dealer lobbying.
Whether Trump nominates Mulvaney or someone else to be the next CFPB director, NADA anticipates that person is sure to be friendlier to businesses and banks than Cordray was.
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