An awkward and slightly tense air greeted ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov/ (CFPB) director Richard Cordray at his first congressional hearing Tuesday, where the new appointee cast his agency as one that would strive to reduce duplication and increase transparency.[IMAGE]
In his testimony before the ""House Committee on Oversight and Government Reform"":http://oversight.house.gov/#, recorded by ""C-SPAN"":http://www.c-span.org/Events/Richard-Cordray-Faces-House-Members-on-the-CFPB/10737427403-1/, Cordray touched on the CFPB's ""Know Before You Owe"" consumer education campaign, ongoing rulemaking procedures to simplify mortgage disclosure forms, and efforts to eliminate duplicative rules the agency inherited from several agencies last summer.
Although careful in their approach to the new director, Republican committee members frequently cited their concerns about federal overreach, the constitutionality of his recess appointment, and interests for transparency.
""You are invested with enormous powers,"" committee chairman Rep. ""Patrick McHenry"":""Patrick McHenry"":http://mchenry.house.gov/ (R-North Carolina ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô known for tussling with onetime CFPB director-nominee Elizabeth Warren last summer ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô began by recommending the ""Securities and Exchange Commission"":http://www.sec.gov/ (SEC) as a model for federal rulemaking.
""Will you at least submit to the idea of laying out the agenda for the next month?"" he asked.
Cordray replied by saying that he felt the CFPB's agenda ""has been clear to everyone who has interacted with us. I[COLUMN_BREAK]
am happy to have our staff work with you. We're not intending to hide the ball.""
The chairman interrupted his response to add he felt it ""would simply be best practice if you look at what the SEC is doing in laying out the regulatory agenda. I think that would give clarity to the public and allay a lot of concerns from businesses├â┬ó├óÔÇÜ┬¼├é┬ª and members of Congress alike.""
Cordray remains a subject of controversy on Capitol Hill more than two weeks after President ""Barack Obama"":http://www.barackobama.com/ sidestepped stiff Republican opposition in the Senate by recess-appointing the former Ohio attorney general to his current role.
The ""Justice Department"":http://www.justice.gov/ released a memo earlier this month in which it sided with Obama, refuting precedent established by past legal opinions that regarded three-day pro forma sessions ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô a tool for keeping Congress in session without conducting business ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô as legitimate ways to prevent recess.
The CFPB director acknowledged the legal opinion and said he agreed with it when pressed by Rep. ""Darrell Issa"":http://issa.house.gov/ (R-California).
Asked by the lawmaker whether he would take into account the CFPB's sustainability in lieu of legal and congressional challenges, Cordray said that he felt ""the appointment is valid.""
""Do you have a Plan B so that the work you are doing carries on despite redundancy of authority?"" Issa interjected.
Cordray replied by calling his situation a ""dilemma"" that nonetheless would force him to move forward with rulemaking and supervisory authority invested in the CFPB under law.
The CFPB went live last July, receiving rulemaking authority for 18 consumer financial laws from seven federal regulatory agencies, including the FDIC, Federal Reserve, Federal Trade Commission, and Office of the Comptroller of the Currency, among others.
With Cordray now director, the bureau carries the authority it needs to supervise nonbank financial entities, including mortgage brokers, agents, and servicers.
The agency released 27 pages of guidance material for mortgage origination examiners last week.