WASHINGTON–A name familiar to—and divisive among—many in credit unions is under consideration to serve as the Federal Reserve’s top banking regulator.
President Biden is considering Richard Cordray, the first director of the Consumer Financial Protection Bureau, to serve on the Federal Reserve. If nominated and confirmed by the Senate, Cordray would become the government’s most influential overseer of the U.S. banking system, succeeding Randal Quarles as the Fed’s vice chairman of banking supervision, noted the Wall Street Journal.
Cordray led the CFPB from its inception in 2012 to 2017, when he left to run for governor of Ohio, a race he lost. He is currently a top official at the Education Department, serving as the chief operating officer of Federal Student Aid, overseeing the $1.6 trillion student-loan program.
Senate Banking Committee Chairman Sherrod Brown (D-OH) told the Journal Cordray is one of several candidates under consideration. Cordray reportedly has the backing of Sen. Elizabeth Warren (D-MA), who was the primary driver behind the creation of the Bureau.
Many Republicans are expected to push back on any Cordray nomination.
CUs Object to Burden
While at the CFPB, “Cordray brought significant changes to consumer finance, a corner of the financial industry that had previously escaped regulatory scrutiny. The agency tightened underwriting standards for mortgages, required more disclosure on credit-card rates and fees, and introduced federal oversight to payday lending,” the Journal noted.
While most credit unions are below the threshold at which institutions are subject to CFPB regulations, the Bureau’s rules still seeped into many aspects of credit union operations, and both CU trade groups repeatedly pushed back against what they called an onerous and growing burden.