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Consumer bureau has opened investigations of some large banks

March 23, 2012|By Jim Puzzanghera
  • Richard Cordray, director of the Consumer Financial Protection Bureau, at a House Oversight and Government Reform subcommittee hearing in January.
Richard Cordray, director of the Consumer Financial Protection Bureau,… (Andrew Harrer / Bloomberg )

Reporting from Washington — The Consumer Financial Protection Bureau has opened investigations into the practices of some large banks, the agency's director said Friday.

"We do have open matters we're looking at involving a range of institutions, large banks, smaller banks and non-banks," Richard Cordray said in an interview taped for C-SPAN's "Newsmakers," which is to air Sunday.

Cordray would not give any details of the investigations, but in the interview with reporters from The Times and Dow Jones Newswires, he said the agency was "active on all fronts."

Discover Financial Services said in a securities filing in January that Cordray's agency and the FDIC had notified the company they planned to take enforcement action over the marketing of some services. American Express Co. said in a filing last month that it could face action from the consumer bureau for late fees charged to some credit card customers of its Centurion Bank subsidiary.

The bureau, which began operations in July, has its own examiners at banks and at some financial companies outside the banking industry, such as payday lenders, Cordray said. The examiners are aggressively looking for violations of consumer protection laws.

Despite the controversy over his appointment, Cordray said he was not shying away from taking on large financial institutions.

"Cleaning up the mortgage market, leveling the playing field between banks and the non-bank competitors, seeing that the law is enforced and people are held accountable, that's what I took an oath [to do] when I was sworn in as the director, to carry out those laws," he said. "So we’re going to do it."

Large banks strongly opposed creation of the agency, which was the centerpiece of the 2010 overhaul of financial regulations. It also is widely expected that some financial institutions will legally challenge Cordray's appointment as director.

President Obama installed Cordray in January with a recess appointment to overcome nearly unanimous opposition from Senate Republicans. But the appointment broke with tradition because it came during a short Senate recess.


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