N.C. Rep. McHenry grills Cordray over CFPB's power

McClatchy NewspapersJanuary 25, 2012 

WASHINGTON — U.S. Rep. Patrick McHenry on Tuesday didn't shy away from his opportunity to condemn the new Consumer Financial Protection Bureau while questioning its new director.

The Cherryville Republican told Richard Cordray, testifying before a House oversight panel, that it wasn't personal, but that Cordray would wield too much ill-defined power that could ultimately hurt financial markets and their customers.

"The fact of the matter is the operations and authority of the CFPB still remain a mystery to Congress and the American public," said McHenry, chairman of the subcommittee.

The agency was formed as part of the Dodd-Frank regulatory overhaul legislation to regulate consumer products and practices both at banks and nonbanks. McHenry was among several Republicans who decried the president's move to appoint the former Ohio attorney general while the Senate was in recess to avoid Republican opposition.

Democrats criticized the hearing, saying it was a continuation of the obstructionism that has characterized the GOP's response to the new agency since it was first proposed.

U.S. Rep. Brad Miller of Raleigh joined 44 Democrats who signed and delivered a letter to the president prior to the hearing. The letter saluted him for making the appointment.

"President Obama made the right decision to move forward with this appointment," Miller said. "He's tried for well more than a year to negotiate in good faith with Senate Republicans, but there's been no good faith..."

The hearing lacked the accusations of lying and evading questions that punctuated a hearing in May.

That's when McHenry went toe-to-toe with Harvard professor Elizabeth Warren, who helped set up the agency, but was bypassed for the nomination to lead it.

But McHenry maintained the heat on Cordray to define the terms that he will use to regulate the nation's financial institutions.

When Cordray struggled to give a definition of "abusive practices," McHenry responded that "...There are trillions of dollars of financial assets that are waiting on your thinking or imagining or going through this process and that adds to uncertainty."

Cordray tried to clarify by saying that he did not think there is uncertainty for business.

"What is very clear in the statute," he said, "is for something to be an abusive practice it would have to be a pretty outrageous practice. And if your business stayed away from pretty outrageous practices, then you should be safe."

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