Director Richard Cordray continues to keep watchers of the Consumer Financial Protection Bureau ("CFPB" or "Bureau") guessing as to his departure from the agency. The unpredictability surrounding his specific departure date, however, obscures key aspects of the CFPB's activities that will have a predictable impact on the financial industry.
CFPB Leadership Uncertain
Rumors of Director Cordray's potential departure started at the beginning of the summer and reached fever pitch before his speech at the AFL-CIO Labor Day picnic in Cincinnati, Ohio, which was perceived as an ideal venue for his declaration of intent to enter the Ohio gubernatorial race. This event was preceded days earlier by his refusal to provide any information in response to House Financial Services Committee Chairman Jeb Hensarling's demand that he declare whether he will serve out his term at the CFPB or resign to run for Ohio governor. Indeed, Chairman Hensarling's demand well could have had the effect of causing Director Cordray to stick to his guns and his CFPB position longer, rather than encouraging his early departure. Moreover, there is little prospect of the President forcibly removing Director Cordray from his position, thereby potentially giving the Democrat valuable political capital for his gubernatorial run in Ohio - a crucial swing state wavering on the brink despite the 2016 vote to elect President Trump. Even so, it is most likely that Director Cordray will leave his post this Fall, well in advance of the natural expiration of his term in July 2018.
While Director Cordray continues to sidestep questions about his political intentions, he did deliver a campaign-style speech at the AFL-CIO Labor Day event, coupling discussion of his record of defending consumers at the CFPB with messages of unity to fight for financial equality and opportunity. We believe the speculation, around the specific date when Director Cordray will declare his gubernatorial run, to be more noise than substance. What is more important is the likelihood that he will leave this Fall - but only after attempting to stave off challenges to the arbitration rule, issuing a payday rule and proposed debt collection rule, and consolidating the groundwork for continued CFPB activism after his departure, as discussed below.
Of course, speculation is also rampant on the question of the CFPB's leadership following Director Cordray's departure. The nomination and confirmation of a new Director will be long...