NEW YORK (MainStreet) — Financial institutions better be on their best behavior. Now that the Consumer Financial Protection Bureau finally has a director, the agency plans to start living up more to the “protection” part of its name.
In his first testimony before Congress as acting director, Richard Cordray informed lawmakers Tuesday that the CFPB will work to ensure that non-bank lenders operate under the same regulations and penalties as more traditional banking institutions.
“In the run-up to the financial crisis, non-bank firms generally were not subject to the federal supervision that applied to banks,” Cordray said in his prepared remarks, alluding to payday lenders, debt collectors and certain mortgage firms, among others. “With a director now in place, the Bureau can work to level the playing field on which our nation’s financial institutions will innovate and compete.”
The agency already took its first step towards better oversight of these institutions with the launch of a federal non-bank supervision program earlier this month, which kicks off individual examinations of each business to assess the risks they pose to consumers. However, as Cordray reminded Congress, with a director in charge, the agency can now do more than just propose new rules and assess institutions – it can also police those organizations who violate laws and hurt consumers.
“Now that we have a director, we have our full authorities to investigate and bring enforcement actions to ensure that financial providers are held accountable if they violate the law, and that the rules of the road governing banks and non-banks are applied evenhandedly to all participants,” Cordray said. “Filing lawsuits or administrative actions will be necessary at times to ensure that the law is followed and respected, and that harm to consumers from unlawful conduct is remedied.”
Translation: The CFPB has got your back.