Cordray Rejected as Nominee to Lead CFPB

Richard Cordray’s nomination as director of the Consumer Financial Protection Bureau (CFPB) was rejected by the Senate today. While the majority of senators voted to support the former Ohio attorney general’s nomination, Cordray fell short of the 60 votes needed for confirmation in the face of a GOP filibuster, leaving the CFPB to continue without an official leader.

Despite having had his nomination approved by the Senate Banking Committee in October, Cordray’s nomination was never likely to be a simple pro forma approval, as many Republicans have long threatened a filibuster, voicing concern about the structure of the CFPB and pledging to oppose any nominee for the position until the structure of the bureau has been revamped.

The final vote was 53-45 in favor of Cordray, with Sen. Scott Brown, R-Mass., representing the only GOP vote for Cordray. Brown’s primary opponent in his bid for re-election is Elizabeth Warren, who played role in creating the CFPB. One senator voted present and one senator was absent.

Since coming online July 21 this year, the CFPB has not been able to take on the role of regulating non-bank entities or issuing new regulations in the absence of a permanent director. The bureau is in the process of reviewing and modifying existing regulations and will remain in this mode until a director is in place, at which point the CFPB will be able to exercise its full oversight and regulatory powers—powers opponents say are too far-reaching and unchecked by Congress.

While Democrats are the majority in the Senate, Senate rules allow the minority to force a 60-vote majority on any nomination. In a May letter to President Obama, 45 Senators vowed to block any nominee for CFPB director unless the leadership structure of the agency was changed from a single director to a board of five. They also called for more oversight of the CFPB by existing banking regulators and for the agency to receive funds appropriated directly by Congress, rather than the current structure, which would fund the CFPB through the Federal Reserve and give Congress less direct control.

It has been widely speculated that President Obama may appoint Cordray in a “recess appointment,” which allows the President to appoint senior federal officials while the Senate is in recess.

While the nomination would still have to be properly confirmed by the end of the next session of Congress, these appointments are generally seen as a way to get around Congress and allow a nominee an opportunity to prove themselves in the position. In the past, when heavily disputed, members of the Senate have taken steps to ensure that the body was not in recess long enough for the president to make such appointments.

CFPB Disclosure of Credit Card Complaints

The CFPB recently released a report detailing its process and data for the first three months of accepting consumer complaints on credit cards issued by large institutions (those with more than $10 billion in assets). When received, the information collected via internet, phone, fax, mail and referral from other agencies was reviewed to ensure the bureau’s jurisdiction and then referred to the appropriate card issuer via a “secure web portal.” The issuer then reviewed the complaint, communicated with the customer, and developed a resolution. Reporting this solution back to the CFPB, the consumer was invited to respond. The consumer can get status updates on the web or by phone throughout this process.

The bureau forwarded nearly 84 percent of all complaints to issuers, with 74 percent of issuers reporting full or partial resolution back to the CFPB. Interestingly, 71 percent of consumers did not dispute the issuer’s reported resolution.

On the heels of this report, the CFPB has issued a call for comments on a proposed policy statement outlining the information that would be publicly disclosed for large-issuer credit card complaints. The CFPB would include in this searchable database the name of the card issuer, type of complaint, consumer’s zip code and issuer’s response. This would be the first step in plans to implement searchable databases of complaints regarding multiple financial service products provided by large institutions.

Complaints for institutions under $10 billion in assets would still be forwarded to the appropriate regulator. While there are no plans for public disclosure of these complaints, this could become a slippery slope with consumer groups and other agencies calling for similar disclosure.

The proposed CFPB policy statement on public disclosure can be read on the Northwest Credit Union Association’s comment call page, which also serves as a forum for feedback to the Association.

NCUA Office of Small Credit Unions Offers Introductory Video

The National Credit Union Administration’s (NCUA’s) Office of Small Credit Union Initiatives (OSCUI) posted its first free video earlier this week. The video, entitled “An Introduction to OSCUI,” provides an overview of the role OSCUI plays within the NCUA, as well as the programs and services it provides.

“NCUA is committed to making sure small credit unions are fully informed of all the resources available to help them succeed,” said NCUA Chairman Debbie Matz. “This video is the first in a series designed to accomplish that goal. This introductory video provides an excellent orientation for small credit unions to become better acquainted with how OSCUI’s services can help them grow and thrive.”

The 30-minute video highlights four programs for small credit unions, including direct assistance, training, financial assistance, and partnerships with government, private, and non-profit organizations.

According to the NCUA, this is the first in a series of videos aimed at highlighting “NCUA’s commitment to the success of small, low-income and newly-chartered credit unions.”

Cuts to Postal Services Will Impact Credit Unions

There has been a lot of coverage lately of the massive budget shortfalls within the U.S. Postal Service (USPS). In addition to raising the cost of stamps, the USPS recently announced that it will soon close more than half of its 500 mail processing centers and will slow first-class delivery in the spring of 2012.

This delay in first-class delivery will mean that items which formerly took two-to-three business days may now take approximately five business days. Items which are time-sensitive and need a guaranteed timely delivery will now cost more. For credit unions, this means no longer being able to count on one-day delivery of statements and information to local communities.

This change may be an opportunity to encourage more members to migrate to e-statements and online bill pay, but it will likely require a period of adjustment.

According to a recent article in the Huffington Post, around 42 percent of first-class mail is currently delivered the next day, with 27 percent arriving in two days. After implementing the expected changes, approximately half of all first-class mail will arrive in two days and the rest in three.


The NWCUA Regulatory Advocacy team works with state and federal regulators to help reduce the regulatory burden on credit unions and protect the credit union movement. The Association encourages members to participate in the regulatory process. If you have any questions on these or any regulatory issues, please contact Director of Regulatory Advocacy Jaycee Winn at, or at 800.995.9064 x209.

Posted in Compliance News, NCUA.