BLOG VIEW: Last Tuesday, Richard Cordray appeared before the Senate Banking Committee in search of the long-elusive official confirmation to become the director of the Consumer Financial Protection Bureau (CFPB). In my view, the senators pitched him a series of softball questions about the agency.
Ah, if only I had a seat on the committee. I would have asked Cordray a series of questions that I believe deserve to be answered. But, hey, I may not have a Senate committee seat, but I have this lovely digital perch. So, if Cordray or his CFPB lieutenants have their eyeballs on this blog, I have some questions that I would love to ask him.
1. In January, a U.S. district court ruled that President Obama violated the constitution when he made a series of recess appointments while Congress was still in pro forma sessions. One of these appointments included your ascension to the CFPB directorship. As a lawyer, can you please explain the legality of your holding an office that you gained through an unconstitutional procedure?
2. In April 2012, you stated, ‘For too long, mortgage servicers have not been held accountable to their customers, and the result has been profoundly punishing to homeowners in distress. It's time to put the 'service' back in mortgage servicing.’ However, HOPE NOW recently released data that showed servicers completed more than 6 million loan modifications since 2007. Are you willing to admit that your comments about servicers refusing to provide service were unfair and inaccurate?
3. Neither the CFPB nor any federal agency has ever produced data that showed an unimpeachable link between robo-signing and wrongful foreclosures. Is there any specific reason why no federal agency is able to offer this particular data?
4. During the past four years, the U.S. Department of Justice under the leadership of U.S. Attorney General Eric Holder has failed to successfully prosecute any of the Wall Street executives who were at the center of the 2008 economic crash. Do you believe that the cause of consumer protection has been well served by the failure to bring to justice the people who created so much misery for consumers in 2008?
5. The other week, Holder told a congressional hearing that his department faces the possibility of wrecking the economy if they prosecute any current executive at the so-called ‘too big to fail’ banks. In your capacity as a former prosecutor, can you please explain, either from a legal or an economic perspective, how filing criminal charges against a bank executive could possibly bring about national economic ruin?
6. The CFPB and the Federal Housing Finance Agency (FHFA) are collaborating on the creation of something called the National Mortgage Database. However, neither agency has bothered to inform the public about how much this endeavor will cost. Can you please explain why the agencies refused to acknowledge the cost of this project? And if you don't mind, can you please tell us how much it will cost?
7. Also on the National Mortgage Database: the FHFA's Office of the Inspector General has warned that the agency suffers from ‘vulnerabilities’ in its computer security procedures. Do you feel comfortable creating a database full of confidential material with an agency that has serious computer security problems?
8. Sen. Elizabeth Warren, D-Mass., equated the Senate Republicans with terrorists by claiming that your CFPB nomination was being held ‘hostage’ because the GOP had concerns on the CFPB structure that were not being addressed. Do you agree with her assertion that you are being held ‘hostage’?
9. Your CFPB term expires at the end of this year, and you have been rumored as a potential candidate in the 2014 Ohio governor's race. At this point, it seems highly unlikely that you will continue at the CFPB beyond the end of the year. So, at the risk of being nosy, can I ask if you are currently exploring the possibility of running for governor of Ohio?
10. In your capacity as CFPB director, you have yet to deliver any speech in which you acknowledge examples of irresponsible behavior by borrowers in the run-up to the 2008 crash and afterward. Such examples would include providing false information on loan applications, running scams to defraud mortgage lenders, intentionally refusing to pay home loans or work with mortgage servicers, and deliberately destroying residential properties in advance of legal evictions. While you pride yourself with protecting consumers from financial institutions, are you willing to go on record and admit that sometimes (actually, many times) there are financial institutions that need protection from consumers?
– Phil Hall, editor, MortgageOrb
(Please address all comments regarding this opinion column to hallp@mortgageorb.com.)
