It only took Richard Cordray a matter of days to become a five-time "Jeopardy" champion in 1987, but it has taken him two years to be confirmed as the first director of the Consumer Financial Protection Bureau.
Following Senate confirmation this week, Cordray tells Power Players his title feels more solid now, allowing him to move forward—in the words of President Obama—as a “cop on the beat” for consumers.
“A cop on the beat is looking out for all kinds of problems in their neighborhoods,” Cordray says. “If you stop watching any of the industries, that's where problems begin to arise.”
President Obama first nominated Cordray to head the CFPB in 2011 after it was created by the Dodd-Frank Act of 2010, but Senate Republicans refused to approve his nomination because of the controversial nature of the bureau’s creation and the new federal authorities it was given. The president then recess-appointed Cordray to lead the CFPB last year.
Despite the uncertainty of the bureau’s leadership over the last two years, Cordray says the CFPB has been moving forward with its authority to supervise and “clean up practices” among financial industries—some of which, he says, have “never been looked at before.”
“We've been looking at rooting out deceptive and fraudulent practices in the credit card industry,” he says. “We've been looking at rooting out fraud in the mortgage market. …We've been looking at credit card reporting and debt reduction -- two industries that are in need of significant change.”
Cordray says the CFPB has also honed in on the debt collection industry--cracking down on deceptive and illegal practices, such as debt collectors who wrongly harass people to pay for debts that don’t belong to them.
“We see these things, and we're now there to enforce the law,” he says. “We also have the authority to go into the debt collection companies using our supervisory authority, see exactly what they're doing, get all the information and clean up practices.”
Another emphasis for the CFPB, Cordray says, is to make disclosures “clear and upfront” for individuals entering into financial contracts.
“Burying something in 50 pages of fine print, it may be disclosed, but it's not really effective disclosure and they know that, and it's a way people can get away with things,” Cordray says. “It's a fundamental sea change for us now to begin to simplify the terms and conditions of transactions like mortgages, credit cards, student loans.”
But he emphasizes that disclosures are only part of the answer to better protect consumers.
“Clear and upfront disclosures are part of the answer,” Cordray says. “There are substantive practices that go on in these markets that are illegal and that need to ends and need to be stopped and if this consumer bureau needs to be the one to step up to make that happen, so be it, we're happy to do it.”
For more of the interview with Cordray, and to hear what constraints he says are in place to keep the CFPB from “running amok” with its federal authority, check out this episode of Power Players.
ABC's Eric Wray, Betsy Klein, Ginny Vicario, and John Knott contributed to this episode.