On April 5, 2017, the House Financial Services Committee held a hearing at which Consumer Financial Protection Bureau (“CFPB”) Director Richard Cordray was the sole witness.  During the five hours of the hearing, a wide partisan split over the performance of the CFPB  and Director Cordray  was on full display.  Throughout, Republicans characterized the CFPB as an unaccountable agency that has limited consumer choice and abused and exceeded its statutory authority.  Democrats, for their part, defended the CFPB, arguing that maintaining the CFPB in its current structure remains indispensable to protecting consumers, and offering effusive praise for Director Cordray’s leadership of the agency.

Chairman Jeb Hensarling (R-TX), a frequent critic of both the CFPB and Director Cordray, began the hearing with a call for President Trump to terminate Director Cordray immediately.  Chairman Hensarling argued that President Trump has ample reason to fire Director Cordray for cause.  Specifically, Chairman Hensarling argued that the CFPB under Director Cordray was responsible for making “credit more expensive and less available in many instances,” specifically for low- and middle-income borrowers, and also said the “the record is replete with instances where [the CFPB] has abused or exceeded its statutory authority.”  Chairman Hensarling’s remarks set the tone for the hearing.  Republican members criticized, among other things, the CFPB’s use of consent orders against companies that admit no wrongdoing and unfair treatment of companies in press releases.  Rep. Sean Duffy (R-WI) referred to the CFPB as a “rotting agency,” and, alluding to rumors that Director Cordray is considering a run for governor of Ohio, suggested that Director Cordray should step down to preserve his political ambitions before the committee had an opportunity to reveal publicly all the reasons he should be removed for cause.

Director Cordray sought to offer a defense of himself and the CFPB in the face of Republican criticism. In his opening statement, Director Cordray touted the results of the CFPB’s enforcement activities.  He also pushed back on the notion that CFPB regulations have hurt consumer financial markets, arguing that “[c]onsumer lending has been ramping up in mortgages, credit cards, and auto loans, and delinquencies remain at historic lows.”  He further argued that the CFPB was particularly needed to combat abuses in markets such as debt collection and credit reporting, where consumers cannot simply walk away from a business.  In the face of repeated calls for him to step down, he insisted he would serve his full term, which ends in July 2018.

Director Cordray was aided in his defense by Democratic members. Rep. Maxine Waters (D-CA), the Ranking Member, accused Republicans of “misguided attacks” on the CFPB, and said she “will continue to stand up for the hardworking American consumers that the agency defends every day.”  Throughout the hearing, Democrats praised Director Cordray as a stalwart defender of consumers and accused Republicans of seeking to undermine the CFPB’s work.

Ultimately, the hearing offered yet another reminder of the significant split between Democrats and Republicans over the future of the CFPB and Director Cordray—with Democrats strongly favoring the status quo, while Republicans envision a very different CFPB without Director Cordray at the helm.