Obama administration tries to soften image of CFPB

From the WSJ's Political Diary:
. . . Mr. Cordray talks about why the CFPB brings enforcement officials to routine bank examinations. "I feel like that has been much misunderstood," Mr. Cordray says. "We want supervision examiners to understand the role of enforcement" and "the enforcement attorneys to understand the role of examination and supervision." That may be true, but it's not how any other federal banking regulator has ever done business, and for good reason. Regulators have to build trust with the regulated to encourage transparency and an open channel of communication, especially during times of crisis. The CFPB has done just the opposite by flexing its legal might. Mr. Cordray adds that he expects a "steady stream" of enforcement actions. Hmm. In part two of the American Banker series, Mr. Cordray addressed the financial industry's other big bugbear: the CFPB's recent release of a database of unverified consumer complaints against credit-card companies. "It's a free market of ideas," Mr. Cordray says, noting the database "puts pressure for everyone to compete with one another over customer service." Well, that's one interpretation. But credit-card companies have been fiercely competing with each other for decades, long before the CFPB came into existence. The release of unverified complaints—another unprecedented regulatory move—serves the interest of no one but trial lawyers looking to levy frivolous class-action lawsuits. Mr. Cordray says he understands industry's "concerns" and will "continue to listen to all sides in terms of how we can improve that database." How comforting. Mr. Cordray, like his predecessor, Elizabeth Warren, has aggressively argued that the CFPB is a force for good in the U.S. economy and that the lack of a serious congressional check on the agency is nothing to worry about. The American Banker series shows that those arguments, no matter how politely phrased, are far from settled.

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