Monday, April 2, 2012

Director Cordray's Coming-out Party

Late last month I attended the Consumer Bankers Association conference where Consumer Financial Protection Bureau Director Richard Cordray gave his first speech before a large industry group.  Unlike his pseudo-predecessor Elizabeth Warren, both he and his remarks came across as reasonable and measured.

Mr. Cordray stated that the overarching goal of the Bureau is to make sure that the consumer is protected no matter what kind of financial product or service is being offered. He focused on the need for clear and concise disclosure and told his audience of mostly bankers that the Bureau will seek to level the playing field between banks and non banks. This will be accomplished by among other things, requiring simple and clear communication and disclosure to the consumer.

His most encouraging remark came in response to a question about bank profitability when he answered,  "Banks not only have a right to profit, but the market won't work without it".  Would that other members of this Administration believe, or at least say something similar.

To those involved in the financial services industry Director Cordray's presentation was more Mom and apple pie than anything. Which in itself is a nice break from Professor Warren. Time will tell if his actions ( or should I say enforcement actions) match his words.

Given the political genesis of the Bureau, there are likely to be big headlines and high profile CFPB enforcement actions in advance of the November elections. The timing on this will be purely coincidental.

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