Barr Holds CFPB Director Accountable
On Tuesday, during a Financial Services Committee hearing, I questioned Consumer Financial Protection Bureau (CFPB) Director Richard Cordray about the Bureau's plans to remedy the mis-designation of Bath County, Kentucky as "non-rural" for purposes of lending rules that significantly will limit access to credit in the community if not corrected.
When I asked if the Bureau would be open to a process where people in rural areas like Bath County, Kentucky could petition to correct the CFPB's error so that the community would be properly classified as "rural," I appreciated Director Cordray's acknowledgment that he "was convinced [the CFPB] got the rural designation wrong, or that it merited reconsideration."
It is clear that government bureaucrats don't always know best and certainly don't know our local communities better than we do, and I am pleased that Director Cordray has at least delayed the rule and taken the lending limitation "off the table" for two years in order to reconsider.
While I understand why Director Cordray would not enthusiastically embrace my bill to hold the CFPB more accountable to the American people, I encourage him to support my bill, H.R. 2672, the CFPB Rural Designation Petition and Correction Act. My legislation would remedy these types of situations created by the government's flawed "one-size-fits-all" policies by simply creating a way for citizens to provide distant government bureaucrats with better information about our own communities.
Finally, if you are having trouble getting a meeting with the CFPB, please let me know.
Congressman Andy Barr: "As you know the rule provides greater flexibility for lenders in rural and underserved areas, particularly to originate balloon loans for example. But we've heard from our constituents that these a problem in some rural areas that have been improperly designated as "non-rural." My question to you would whether or not the Bureau would be open to allowing a process whereby wrongly designated areas could petition your agency for a proper designation of "rural" status."
CFPB Director Richard Cordray: "I was convinced we got the rural designation wrong, or that it merited reconsideration. So we took that off the table. None of these lenders have to worry about that for the next two years while we rethink it. So I think we have done exactly what they wanted, which is that nobody is being affected by that designation now. We will rethink it and potentially it will end up being a different designation when were through working through this. And we are interested in hearing from them, we heard a lot from them initially and that's what caused us to pull back."
Congressman Andy Barr: "Whether it is in the case of auto lending bulletin or the case of the QM rule, I would encourage the Bureau to allow more participation, whether its notice and comment or a petition process where the American people can actually correct what the Bureau is doing..."
CFPB Director Richard Cordray: "If you have anyone who is having trouble getting a meeting with us, you let me know. We are pretty accessible, widely accessible."