CFPB Director Richard Cordray To Step Down

Keywords: Administrative Law, CFPB, CID, Civil Investigative Demand, Consumer Financial Protection Bureau, D.C. Circuit, Debt collection, Enforcement, RESPA, Rulemaking

In an email to staff, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray announced on Wednesday, November 15, that he will be stepping down this month. His departure was widely anticipated. Because the CFPB is headed by a single director - as opposed to a 5-member commission - the agency's director wields enormous power. Below we address some of the most frequently asked questions regarding Director Cordray's resignation.

Who takes over when Director Cordray steps down?

Like so much else involving the CFPB, the answer to this seemingly simple question is controversial. On the one hand, the Dodd-Frank Act provides that the agency's Deputy Director shall "serve as acting Director in the absence or unavailability of the Director." That suggests that Acting Deputy Director David Silberman would take over as Acting Director until the President appoints and the Senate confirms a new Director.

Press reports, however, indicate that the White House plans to appoint an Acting Director. Presumably, that step would be taken pursuant to the Federal Vacancies Reform Act. That Act provides that the when a Senate-confirmed official resigns, the President can appoint another Senate-confirmed individual to serve on an acting basis.

What powers does a CFPB Director have?

The CFPB Director has substantially more power than the Commissioner of a typical 5-member Commission. The Director personally authorizes all enforcement actions (settlements and lawsuits) as well as new regulations. Moreover, the Director can establish the agency's priorities and policies. In short, the CFPB Director has substantial authority to determine how the CFPB exercises the broad powers granted to it by Congress. We can reasonably expect that a Trump-appointed successor will exercise these authorities very differently than Director Cordray did.

What happens to existing investigations or lawsuits?

We expect existing investigations to continue, but their resolution may well be impacted by who takes over and when. Particularly in cases that are at the edge of the agency's authority, that represent novel or aggressive legal interpretations, or in which the CFPB is seeking broad remedies, a new Director may be less inclined to support staff's recommended course of action.

It is unlikely that today's...