The Consumer Financial Protection Bureau (CFPB) is under investigation from the House Financial Service Committee. The Committee is accusing CFPB’s director, Richard Cordray, for allegedly misleading the committee’s investigation on Wells Fargo’s machinations of opening unnecessary, and sometimes, unauthorized accounts.
A report released by Republican staff alleges that Director Cordray was defiant to provide specific inquiries requested by the Committee. The Committee asserted that Cordray wouldn’t produce relevant internal records regarding Wells Fargo branch sales issues, even after the Committee’s subpoena of those documents. Although, Director Cordray maintained that an “independent and comprehensive” investigation of Wells Fargo’s sales practices was conducted, the report affirms that there are no records before the committee that corroborate that claim.
If the report’s allegation are proven to be true, Cordray could be dismissed from office. Misleading a Congressional committee can give President Trump ground and substantial leverage to fire Cordray, as per the legal standard in the Dodd-Frank Act.
If Director Cordray does not produce all responsive orders to the committee’s subpoena, the panel’s chairman, Rep. Jeb Hensarling, R-Texas, might initiate contempt proceedings and issue deposition subpoenas to CFPB employees.
The “Was the Cop on the Beat?” report alleges that CFPB depended heavily on the investigation by the Office of the Comptroller of the Currency (OCC) and the L.A. City Attorney, Mike Feuer, who initiated the Wells Fargo investigation, to have access to evidence of the probe.
Timing of CFPB’s investigation of Well Fargo is significant. The Los Angeles Times published their article on Wells Fargo’s schemes late 2013. The L.A.City Attorney, Mike Feuer, filed a complaint against Wells Fargo in May 2015. Shortly after, Wells Fargo claimed that they self-reported their engagements to the CFPB and the OCC. However, during Cordray’s testimony, he affirmed that CFPB was already looking into Wells Fargo’s retail branch policies. The report alleges that there is no evidence for Cordray’s claims. A CFPB exam report delineates that CFPB did not involve itself in the investigation until after the first complaint was filed.
In September 2016, Wells Fargo reached a settlement that totaled in $185 million in fines and $5 million to remediate customer harm. While democrats are using this fact to argue how CFPB has benefitted Wells Fargo customers, the committee report is arguing the contrary.
The report reveals that based on certain committee reviews, there has been communication between OCC employees and CFPB. However, no decision memoranda and communications has been provided by CFPB to the panel. Moreover, the report alleges that CFPB attempted to redact some of OCC’s records before they were produced to the committee. The report is ultimately extrapolating that CFPB possesses and is failing to produce other records that pertain to the committee’s earlier requests and subpoenas.