Richard Cordray, director of the Consumer Financial Protection Bureau, faced a grilling yesterday as he answered to the Senate Banking Committee on issues including auto finance, a sector he called “red hot.”
Cordray had a lively back and forth with Sen. Jerry Moran (R-Kan.), who was part of the group of senators who wrote to Cordray last month asking for clarification on proxy methodology. In yesterday’s hearing, Moran asked if the bureau has done “specific analysis on the data collected” to see if it is reliable.
Rather than offer a yes-or-no answer, Cordray noted that proxy methodology is “time-honored and well-tested,” adding that the bureau had “refined” the data process in some ways.
Regarding a potential industry shift to flat-fee pricing, Moran said: “If fewer consumers can borrow money to purchase a car, we’ve done a lot of damage to the consumer and the economy.”
Cordray was clear about the fact that sometimes CFPB couldn’t do all the research and discussion it would like because it doesn’t have jurisdiction over dealers, only lenders. “We do not want to be misconceived as trying to extend our reach over auto dealers,” he said. “We know that we don’t, we’re trying very hard to observe the line that Congress drew.”
In response to a question from Sen. Elizabeth Warren (D-Mass.) about CFPB’s inability to completely regulate auto loans, Cordray noted that “the law that we have is the law that we’re working with.”
