The Consumer Financial Protection Bureau has begun its operations, tackling abusive practices in the financial sector. As the financial market crisis has its roots in the deceptive and negligent practices of this sector, the new bureau is working to shield Americans from any future predatory bank behavior. As the Consumer Financial Protection Bureau ramps up its activities, it is clear that the banking industry strongly contests this new governmental agency (indeed the sector lobbied intensely against it formation under the Dodd-Frank Act in the first place). Thus, it is important for the Obama administration to remain committed to its purpose.
However, the bureau’s start has been inauspicious. The Consumer Financial Protection Bureau currently lacks a director, and thus cannot regulate at its full capacity. Richard Cordray has been nominated by President Obama to lead the new agency, but his nomination has been met with disdain by Senate Republicans who are working to defeat Cordray’s nomination unless Senate Democrats are willing to diminish the bureau’s power. Cordray’s confirmation hearing was rescheduled recently from early August to September. While Obama may have signaled capitulation already when he passed over Elizabeth Warren as bureau chief, the creative mind behind the bureau, Richard Cordray needs the administration’s full support to not only win the nomination, but to also take on the banks in the future and protect consumers from abusive practices.