Lawmakers Land Few Punches as CFPB's Cordray Visits Capitol Hill

WASHINGTON — For all the angst over Richard Cordray's controversial recess appointment to run the Consumer Financial Protection Bureau, the new agency chief came out of his first congressional hearing since starting the job remarkably unscathed.

Questions from the GOP-run House Oversight subcommittee were pointed, and revealed continued doubt by some lawmakers about the legitimacy of his hiring. But the tenor was considerably more constructive than past hearings with CFPB officials, including former agency chief Elizabeth Warren.

For his part, Cordray was resolute about his ability to execute the bureau's full power.

"The one thing we cannot do, and I think would be a dereliction of duty, is for me to say that we're not going to go forward and do the things that the law of the land has asked us to do" because of concerns about the recess appointment, Cordray said. "That is not tenable."

To be sure, GOP members did not give Cordray a free pass. They not only reiterated concerns about the bureau's accountability and transparency, but continued criticism of the White House for using a recess appointment to install Cordray even though the Senate was still in a "pro forma" session.

Subcommittee Chairman Patrick McHenry, R-N.C., who had infamously butted heads with Warren during one of her appearances before the panel, called Cordray an "unelected and unaccountable bureaucrat."

"If having a regulator with unprecedented and ill-defined power was not enough, the administration decided to double down by bringing into question the validity of its director," McHenry said. The move "jeopardizes the sanctity of the bureau's operations and is unfair to Mr. Cordray, the bureau and most importantly, the American public," he added.

In response to McHenry and other members' doubts, Cordray said he is not focused on the circumstances around his appointment but rather the bureau's duties.

"I understand the controversy that people have raised about the appointment," Corday said. "My intention here is, I'm in the job, it's an important job, it's a big job. All I can do is try to carry out the responsibilities that the law of the land now has put on my back and to try to do it in a way that is consistent with the values you attributed, which I think are good ones — transparency and accountability."

And, indeed, members seemed interested in his appointment only to a point, spending considerable more time asking Cordray about the agency's work than his own job status.

Rep. Guinta, R-N.H., urged Cordray to err on the side of being "over-transparent" about the bureau's initiatives, including the posting of more information on the CFPB's website.

"Those things are extremely important, I think for the country and for those that you oversee, so you have credibility and the agency has credibility," Guinta said.

Responding to a question from McHenry, Cordray sounded open to adopting a disclosure model similar to that used by the Securities and Exchange Commission, in which the CFPB would post publicly everything expected on the bureau's agenda for a coming year.

"If that seems to be a best practice, that's something that we are happy to do . . . if you want to have it on a piece of paper or our website," Cordray said.

Overall, the mood between Cordray and members of the subcommittee was more respectful than in hearings past, most notably in May when an exchange between McHenry and Warren — who first proposed the idea for the bureau — grew tense and Warren was later accused of not answering all of the panel's questions. (Warren is now running for a U.S. Senate seat from Massachusetts.)

Highlighting the contrasts, McHenry thanked Cordray for being responsive to inquiries while noting Warren's responses were "fuzzy at best."

Toward the end of the hearing Tuesday, McHenry said to Cordray, "You've given a great deal of explanation, we appreciate that, and we certainly appreciate the exchange of ideas."

Cordray reiterated a pledge that he made at his nomination hearing last summer to actively reach out to small businesses and to convene panels of small business leaders, as required by the Dodd-Frank, related to any major regulation that could potentially impact on those businesses.

Democrats on the committee dismissed Republican claims that the bureau is unaccountable to Congress by highlighting the number of times CFPB officials have been called to testify on Capitol Hill — 12 times since last March.

"Today is the third time in eight months that CFPB officials have been called before our committee," Rep. Elijah Cummings, the full committee's top Democrat, said in his opening remarks. "Our committee has targeted the CFPB — unfairly in my view — as part of a broader campaign to prevent it from becoming fully operational."

Rep. Carolyn Maloney, D-N.Y., implored Republicans on the panel to respectful toward the new CFPB chief.

"Some hearings can be described as a 'fishing expedition'; I hope today's hearing doesn't become a 'bashing expedition' by the members of the majority, treating Director Cordray as badly as they treated Elizabeth Warren in the past," she said.