Yesterday the Committee on Oversight & Government Reform held a hearing entitled “Credit Crunch: Is the CFPB Restricting Consumer Access to Credit?” Richard Corday, Director of the CFPB, was among those to testify.
Cordray was questioned about whether there exists a link between over-regulation and access to credit. While Cordray initially responded with a general history of the financial crisis response, when pressed a second time Cordray agreed that the regulatory pendulum can swing too far and “you could compound the problem.”
Cordray also was questioned about the CFPB’s rule regarding qualified mortgages (QM). Cordray acknowledged that many community banks he’s heard from are very concerned about the QM definition and whether it is going to be a safe harbor or rebuttable presumption. Stating that concerns have “been conveyed” to the CFPB from “all over the spectrum” that “if QM is too narrow that could upset the market. We’re very concerned, making sure we don’t do that.”
Cordray stated while it would be hard to determine long-term effects, in the short-term the CFPB acknowledges there would most likely be little lending outside of QM, which is why the CFPB would like to be more inclusive in its definition.
Read more about the hearing.
For a compendium of CFPB resources and analysis, see ABA's CFPBureau Watch.