By: Murray Silverstein and Jacob Boehner
Richard Cordray announced today that he is resigning the end of this month. Cordray, an Obama appointee and the first director of the Consumer Financial Protection Bureau (“CFPB”), informed his staff of his plans, with some speculating that he has his sights set on running for governor of Ohio, his home state.
Cordray has drawn extensive criticism in his tenure as director. His resignation comes on the heels of Congress’s vote to rescind the CFPB’s final rule banning the use of pre-dispute arbitration clauses in consumer arbitration agreements to block consumers from bringing class action lawsuits. President Trump later signed Congress’s joint resolution , effectively repealing the CFPB’s final arbitration rule even after receiving a letter from Cordray imploring him to uphold the rule.
The president’s express criticism of the arbitration class action waiver rule was clear well before he signed Congress’s joint resolution. Both before and after the congressional votes, the president released statements first disapproving of the CFPB’s final rule and then praising Congress for voting to rescind it. It seems clear that President Trump will be motivated to appoint a new director who is more politically and ideologically aligned with the current administration. The resignation of Cordray is a watershed moment in the consumer finance industry as the often criticized overreaching of the CFPB is likely to come to an end with a Republican-appointed director who will likely issue more modest rules that will benefit consumers without also harming financial institutions.
See also Client Alert: Senate Votes to Rescind CFPB’s Final Arbitration/Class Action Waiver Rule.
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