CFPB Director Richard Cordray Will Step Down Before End of November

Cordray made no mention of his long-rumored interest in the Ohio governor’s race, but his departure is sure to fuel further speculation of a campaign. Last month, a federal agency cleared Cordray of allegations that he improperly positioned himself for a gubernatorial run while serving as the CFPB director.

A champion to consumer advocates, Cordray has been scorned by Republicans and many in the financial industry as an overzealous regulator who’s used his tenure atop the CFPB to aggressively test the limits of the agency’s — and, by extension, his own — authority. Cordray’s exit opens the door for President Donald Trump to install a more industry-friendly leader who could downshift the agency’s enforcement engine and revisit controversial regulations.

Since Trump took office in January, the CFPB showed no indication it was backing down in the face of an unfriendly Trump administration. In addition to finalizing restrictions on arbitration agreements and the first comprehensive regulations on the prepaid card market, the agency has pursued enforcement actions against the likes of Navient and Ocwen Corp., leading servicers of student loans and mortgages, respectively. The push to restrict arbitration failed in October when Congress overturned the rule.

It has done so while the Justice Department, under the leadership of U.S. Attorney General Jeff Sessions, switched sides in a case contesting the agency’s constitutionality and argued — against the CFPB — that the president should be empowered to readily fire Cordray and future directors. Meanwhile, the U.S. Treasury Department under Secretary Steve Mnuchin proposed reforms to financial regulation that included stripping the CFPB of its independence or, in the alternative, transforming the bureau into a five-member commission akin to the Securities and Exchange Commission and Federal Trade Commission.