Richard Cordray testifies before a House Oversight and Government Reform… (Alex Wong, Getty Images )
Reporting from Washington — Richard Cordray, head of the Consumer Financial Protection Bureau, told lawmakers that he would not abuse his power and promised that the agency would take action only against companies that break the law.
"It … is not our intention to start going off and acting like we're some sort of mini-Congress, just doing anything we think is good and right," Cordray told members of a House Oversight and Government Reform subcommittee Tuesday.
The agency would follow existing interpretation of consumer laws covering financial products and "should not be going off in some wild, new unexpected direction" that would cause confusion among banks and other firms, he said.
Republicans said they appreciated Cordray's answers during the 2 1/2-hour hearing and his openness to providing more information about the agency's plans and approach.
Facing lawmakers for the first time since his controversial recess appointment Jan. 4, Cordray tried to allay fears of congressional Republicans that the powerful new agency would add to the uncertainty felt by many businesses about Washington regulations.
Republicans and business groups have questioned the legality of President Obama's decision to install Cordray during a brief Senate recess, and lawsuits challenging the appointment are expected.
Rep. Patrick McHenry (R-N.C.), the subcommittee chairman and a strong critic of the consumer bureau, said Obama's actions only increased the trepidation of financial firms about the agency.
"If having a regulator with unprecedented and ill-defined power was not enough, the administration decided to double down by bringing into question the validity of its director," McHenry said. "That's unfortunate."
Rep. Darrell Issa (R-Vista) asked Cordray if he was taking any precautions, such as recusing himself from major decisions, to make sure agency actions would not be wiped out if his appointment were invalidated by the courts.
"It's a bit of a dilemma," Cordray said. But he said he believed his appointment was valid and that the agency must move forward with the responsibilities given to it by Congress.
Democrats defended the recess appointment, which they said was required because Senate Republicans were blocking Cordray's confirmation. A group of 49 Democrats sent a letter to Obama on Tuesday thanking him for appointing Cordray.