ABIA attended the Senate Banking Committee hearing today, in which CFPB Director Cordray provided the Bureau’s Semi-Annual Report to Congress. Although the Qualified Mortgage (QM) Rule was discussed, there was no mention of lender-placed insurance or the impact of the “points and fees” test on affiliated insurance sales. For the QM Rule, the Senators were mostly interested in determining how the CFPB defined community banks and rural areas that are exempt from the rule, with Senator Hagan (D-SC) indicating that the definition of rural areas did not go far enough.
In his opening remarks, Senator Crapo reaffirmed his opinion that Cordray’s recess appointment to Director by the President was unconstitutional and that he supports changing the CFPB from being headed by a Director, to a “Board like structure.”
In addition, House Financial Services Committee Jeb Hensarling (R-TX) said in a letter yesterday to Director Cordray that the Committee “stands ready to accept the testimony of the Director of the CFPB on the semi-annual report as soon as an individual validly holds this position.”
Chairman Hensarling noted that “[a]bsent contrary guidance” from the Supreme Court, Cordray does not “meet the statutory requirements of a validly serving Director of the CFPB, and cannot be recognized as such.”