Not surprisingly, one of the best sources for understanding the thinking and direction of the CFPB is the speeches given by Director Richard Corday. The Director frequently speaks to industry and consumer groups, and occasionally writes editorials that are published in opinion-leading newspapers nationwide. The Director also gives testimony to Congress.
Mr. Cordray's testimony and answers to questions at Congressional hearings have become rote. In his latest appearance on March 16th to present the Bureau's Semi-Annual Report to Congress, the Director extolled the virtues of the CFPB in fulfilling its mission of protecting consumers. He cited improvements within the Bureau, including its ability to better receive, process and facilitate responses to consumer complaints. He also highlighted the Consumer Complaint Database where consumers can now share “in their own words” their experiences; and the monthly reporting of key trends in consumer complaints.
The written testimony went on to discuss the CFPB's development of financial decision-making tools for use by consumers and working with other government agencies, social service providers and community service providers to use such tools. And, the report highlighted the many enforcement actions granting $5.8 billion in total relief for consumers and $153 million in civil money penalties during the reporting period (six months).
Further, the Director's report highlighted the supervisory function of the CFPB and its regulatory function as well. His written testimony before the House Committee is available here.
One subject that the Director did not address in this appearance before Congress, but he did address at the Consumer Bankers Association meeting earlier in the month, was his view that consent orders entered into between the CFPB and the target defendant are “intended as guides to all participants in the marketplace to avoid similar violations”. That is, even though a particular matter involves only the conduct of the party under review by the CFPB, other companies should review their policies, practices and procedures to avoid the type of conduct that any Consent Order finds to be an unfair, deceptive or abusive act or practice, or otherwise in violation of the Consumer Credit Protection Act.
This practice amounts to regulation by enforcement—that a consent order between a government agency and a private party has precedential value. This practice is historically scorned by agencies and courts alike. Consent orders are not published court opinions; nor are they regulations, bulletins or guidance that the CFPB is authorized to publish to help guide industry business conduct. Of course, as a practical matter, lawyers and clients have long looked at the actions of the CFPB in their published consent orders as an indicator of what may be problematic conduct. In so doing, the specific facts of the matter must be considered in order to draw conclusions as to the applicability of the consent order of an unrelated company, to one's own business conduct. Having the Director boldly state that consent orders are precedent, is indeed news.