WASHINGTON (Reuters) - The head of the U.S. consumer financial watchdog on Wednesday defended the need for the agency, which has been under near-constant attack from Republicans this year, saying it provides important protections for consumers.
The director of the Consumer Financial Protection Bureau, Richard Cordray, rarely addresses political moves or the lawsuit that could defang his agency, which was created after the financial crisis to protect individuals from fraud in lending.
In a speech at a community development conference, Cordray did not mention names or specifics. But he argued at length for maintaining the CFPB’s rulemaking work, its enforcement powers, and its public database of consumer complaints - all at the heart of current assaults on the agency.
“Consumers want and need to have someone stand on their side to see that they are treated fairly. We seek to protect them against unfair surprises, frustrating runarounds and bad deals that ruin their credit, cost them their homes and saddle them with further problems,” Cordray said.
Republicans have criticized the CFPB since it was included in the 2010 Dodd-Frank Wall Street reform law, one of the biggest achievements of former President Barack Obama, a Democrat. But they could only realistically consider reorganizing or dismantling the agency after the November 2016 elections when they kept control of Congress and fellow Republican Donald Trump took the White House.
Republicans say the CFPB oversteps its power and should be more accountable to elected leaders. They also question whether its sole director should be allowed to both write and enforce rules.
The House of Representatives is poised to pass legislation next week that would eliminate the CFPB’s website showing consumers’ complaints, curb the CFPB’s authority to go after deceptive practices, and bar it from supervising large banks. It would also move the agency’s funding from the Federal Reserve to the congressional budget and allow the president to fire a CFPB director at will. Currently, the director can only be removed for cause.
Trump supports the efforts. His Justice Department has even argued against the agency, saying its single-director structure is unconstitutional, in a lawsuit involving mortgage company PHH Corp that could ultimately reach the Supreme Court.
In his speech, Cordray said the agency also helps companies.
“They are protected by reasonable regulation and oversight against the worst excesses of unfair competition perpetrated by those who are willing to violate the law or cut corners to get an unfair edge in ways that harm consumers,” he said.
Reporting by Lisa Lambert; Editing by Leslie Adler