On July 15, 2015, Consumer Financial Protection Bureau (CFPB or
the Bureau) Director David Cordray testified before the Senate
Banking Committee on a variety of issues in response to questions
from the representatives after his prepared remarks. These issues
included:
Arbitration Study and Rulemaking: In
response to queries from Senators about the Bureau's recently
released study of forced arbitration clauses, Director Cordray
noted that the Bureau would proceed with its plans for rulemaking
in this area. He characterized the CFPB's study as thorough and
explained that the Bureau considered information from a wide
variety of sources in concluding that forced arbitration clauses
rarely benefit consumers. He stated that the CFPB would convene a
small business review panel as the first step in this
rulemaking.
Regulation of Auto Lenders: Chairman
Richard Shelby and Senator Tim Scott (R-SC) both questioned whether
the CFPB's recent attempts to regulate automobile lenders
contravened the specific exemption under Dodd-Frank. Director
Cordray responded that the CFPB has jurisdiction over auto lenders
and will act to address violations of the law by lenders. Director
Cordray noted the distinction between lenders, which are subject to
CFPB jurisdiction, and dealers, which are not.
CFPB Data Collection: Several Senators
expressed their concerns that the CFPB is collecting vast amounts
of personally identifiable information. Director Cordray explained
that the CFPB collects personally identifiable information only if
(1) consumers give personally identifiable data so that the CFPB
can work on their complaint; or (2) the CFPB needs the information
to provide relief to consumers. He further stated that the CFPB
does not maintain in its databases any consumer names, addresses,
social security numbers, or account numbers.
TILA-RESPA Forms: In response to an
inquiry from Senator Scott, Director Cordray confirmed that the
CFPB does not support a grace period for the implementation of the
new rule. He explained that the CFPB would not be punitive with new
forms in the first few months after implementation. He also noted
that the CFPB has tested the new forms, which consumers found to be
more accessible and easier to understand than the old forms.
CFPB Definition of "Rural": In
response to queries from Senators from rural states about the
CFPB's definition of "rural" (contained in the
Bureau's proposed rule regarding the facilitation of credit in
rural and underserved areas), Director Cordray explained that the
Bureau's revised rule now covers 22% of the population. He
further noted that the Bureau is working to finalize the definition
by the end of the summer.
Native American Tribe Consultation
Process: Director Cordray confirmed that the CFPB has
a policy on consultation with Native American tribes and that the
CFPB has received input on the policy from Native American
tribes.
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