The nation's youngest government agency recently celebrated its four-year anniversary, and it's still got plenty to do.
The Consumer Financial Protection Bureau was born out of the Dodd-Frank financial overhaul law that passed in 2010 and started a year later. It was given a direct, but mammoth task: regulate and root out bad behavior in the financial services industry, from checking accounts to credit cards, mortgages to debt collection, and more.
The CFPB's existence has been brief, but it hasn't been quiet. The agency has extracted billions in settlements from the big banks. Is looking to regulate the payday lending industry at the federal level for the first time. The bureau also rolled out a somewhat controversial consumer complaint database, where customers of banks, credit card companies or other providers of financial services could file complaints that can be made available to the public online.
Richard Cordray was not the White House's first choice to lead the agency. Elizabeth Warren, now a senator from Massachusetts, was put forth for the job but her nomination was blocked. Cordray's own nomination was hardly smooth sailing. He was confirmed in July 2013 after a two-year fight with Senate Republicans.
Cordray spoke with The Associated Press by phone about the last four years, and where he thinks the agency is headed. The interview has been edited for length and clarity.
Q: What do you consider the bureau's greatest accomplishment and why?
A: I would say three things, since you always hate to choose which one is your favorite. We set up a consumer complaint database, and we've worked to get money back to consumers through enforcement actions. We have put nearly $11 billion back in the pockets of consumers, something we are very proud of. More importantly, it is changing behavior at the banks and institutions. Lastly, what we've done in the mortgage and housing market, which is what led to the financial crisis.
Q: On the other side, what do you wish the CFPB was able to accomplish that it hasn't?
A: I wish we could be doing more, faster. In the early days, we were given a lot of tasks by Congress to fix the mortgage market and we have worked hard on that. We are now turning to some other important issues, like practices by financial companies that mislead consumers, debt collection and credit reporting. We worry about discrimination in the financial industry, which still exists, even though we all wish that it didn't, and debt traps like payday loans.
Q: The bureau has taken on a lot already: credit card add-on fees, mortgage lending, debt collection practices, etc. After four years, does it still feel like it's scrambling to catch up?
A: I think we are. It's a shame this agency didn't exist 20 years ago. It may have prevented some of these problems before they happened. We stand on the side of the consumer in a financial marketplace where you're dealing with the largest most powerful institutions in the world. People have deserved that for a long time.
Q: Consumer advocates have applauded the bureau's effort to regulate payday lending, but there have been concerns that the proposed rules may not be strong enough, or that the industry may maneuver around them, as they've done in the past.
A: It's a legitimate concern. We saw what happened with the Military Lending Act, but we worked with the Department of Defense to fix this. As for payday lending generally, we want to allow access to credit when people have emergency needs. But, at the same time, we want to keep consumers out of debt traps.
Q: The peer-to-peer lending business, which includes companies such as Lending Club and Prosper, remains largely unregulated despite rapid growth in loan originations. Is there a need for more oversight?
A: We have been monitoring it and have had some of the companies in to talk to them. So far it has been a pretty consumer friendly industry. We will see how it develops.