Busy Without a Boss - CFPB Gets Cranking
The Consumer Financial Protection Bureau (CFPB) may not have a director, but that hasn’t stopped if from getting straight to work. Although its powers are limited until the Senate confirms a director, the CFPB recently kicked off two major efforts that prove it isn’t letting Senate Republicans slow it down.
Today, the CFPB and the Department of Education announced that they are working together to simplify financial aid offers for college students. The “thought starter,” (CFPB officials were careful to emphasize that this was not a formal proposal), would require all financial aid providers to supply students with a one-page “shopping sheet” containing basic information including the total cost of attendance, total debt at graduation and monthly debt payments thereafter. It also requires clear distinctions between scholarships, which do not have to be repaid, and loans. The new disclosure aims to make the costs and risks of student loans easier to understand and comes as part of the CFPB’s broader “Know Before You Owe” initiative; aimed at simplifying the paperwork borrowers receive when applying for loans.
Earlier this month, the CFPB issued the “CFPB Supervision and Examination Manual,” describing the supervision and examination process, outlining specific examination procedures and presenting templates for documentation. The CFPB has stated that these procedures will be used to examine “supervised entities.” This perhaps purposely vague characterization may reflect the bureau’s hope that it will soon enjoy its full authority, rather than being limited to bank oversight. In this vein, the CFPB included examination procedures related to compliance with a number of statutes, which, while applicable to banks, could have broad applications to a number of non-bank institutions.
Meanwhile, the CFPB awaits a director. The Obama Administration has pulled out all the stops to rally support around former Ohio Attorney General Richard Cordray, who was nominated by President Obama on July 17, 2011 and approved by the Senate Banking Committee on October 6, 2011. The Obama 2012 campaign website includes a tool enabling supporters to send one of four prewritten messages to the 44 GOP Senators who have vowed to block Cordray’s confirmation until the CFPB is restructured. Last week, The National Association of Attorneys General sent a letter to Senate leaders supporting Cordray’s nomination. Thirty-seven state attorneys general signed the letter, which they said was intended to put pressure on Senate Republicans to explain “why they aren’t acting.”
Ranking Member of the Senate Banking Committee Sen. Richard Shelby (R-AL) countered saying that he and his Republican colleagues sent the president a letter in May and never received a response. Said Shelby, “We haven’t heard from the president. Maybe he’s off campaigning,”
