As Richard Cordray leaves his post as director of the Consumer Financial Protection Bureau at month’s end, auto lenders should “take the long view,” said Lucy Morris, a partner with Hudson Cook LLP.
“There is no suggestion that the agency is going to lose its authority or its various tools,” Morris told Auto Finance News. “This is an agency that’s here to stay, and they have a very dedicated staff. Even if things slow down in the short term, auto lenders are under the CFPB’s jurisdiction, and it’s important to understand that the CFPB will be their regulator for the long run.”
Acting Deputy Director David Silberman is next in line to succeed Cordray under the Dodd-Frank Act, according to a blog post from Buckley Sandler LLP. “However, President Trump may seek to replace Silberman under the Federal Vacancies Reform Act, although his authority to do so is unclear,” the post reads.
Silberman is expected to continue the policies of Cordray, however, with the arbitration rule defeated and the payday lending rules released, there isn’t much left on his plate, Benjamin Olson, a partner at Buckley Sandler told American Banker.
Under Cordray’s leadership, auto lenders have been under the microscope for charging higher interest rates to minority classes, resulting in, for example, a combined $142 million in settlements with Ally Financial Inc., American Honda Finance Corp., Fifth Third Bank, and Toyota Motor Credit Corp.
Earlier this year, Cordray confirmed that the bureau is actively investigating Wells Fargo Dealer Services for possible abuses and fines related to the forced-insurance scandal.
While Morris said “it’s too soon to say who is going to come in and what their style will be,” a few names have been floated. Chief among them could be the bureau’s most vocal critic Jeb Hensarling (R-Tex), chairman of the House Financial Services Committee, especially since announcing he won’t run for reelection.