On Wednesday, January 4, President Obama appointed former Ohio Attorney General, Richard Cordray, as Director of the Consumer Financial Protection Bureau (CFPB). This appointment comes after months of Congressional obstruction and delay.
Wasting no time in protecting consumer and homeowners, Cordray launched the first federal nonbank lender supervision program. These include businesses such as mortgage lenders and servicers, payday lenders, and debt collectors. Since these businesses are not considered banks, they do not have to follow the same guidelines as traditional banking institutions. As such, many of these businesses have been able to perform predatory lending, as well as other dishonest practices that led to the housing market crash and economic downturn. According to the CFBP, this new oversight program is “designed to ensure that nonbanks comply with federal consumer financial laws”. Included in this program are individual examinations conducted by the CFPB to ensure that nonbanks are compliant to federal regulations.
For more information about the program, please visit the CFPB’s website.