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Prepared Remarks of CFPB Director Richard Cordray at the National Association of Attorneys General

Thank you for having me back again this year. I am glad to say that I now stand before you as the undisputed Director of the Consumer Financial Protection Bureau, having been confirmed by a strongly bipartisan vote of the Senate last summer. That was an important milestone for me and for our new agency, and we all thank you for your strong support throughout that process. It means not only that the Consumer Bureau has fully come into its own, but also that we are building a solid foundation for a long time to come.

We continue to move forward with our mission to make consumer financial markets work better for consumers and for honest businesses. But what I want most to talk about with you today is the many ways we are building and strengthening our partnership with you. Through our work together, we are looking out for people all across this country. We are seeing to it that they are being treated fairly by the powerful financial companies that make up the markets for consumer credit and other household financial products and services. It is good work, important work, and it is clearly work that we can do best when we do it together.

When Elizabeth Warren first recruited me to join the new Consumer Bureau just over three years ago, she told me she wanted someone to lead our enforcement efforts who could understand and work well with the state attorneys general. I was highly motivated to show that she had made the right judgment about me, and we built a strong and exceptionally talented enforcement team that has grown to meet her vision, including some outstanding lawyers with valuable experience that they gained from working in various attorney general offices.

For myself, I have made it a point to be here every year at the winter NAAG meeting to discuss with you our developing efforts to protect American consumers. When it later turned out, unexpectedly to me, that I would be nominated to run the Bureau, this purpose did not change. At this new agency, we have found that we can achieve some tremendous results by working together and being great partners.


Let me start by pushing you to consider doing something that most of you have not yet done, but that would be quite helpful to you, your staff, and your constituents.

Under our statute, the Consumer Bureau is required to develop and operate a process for receiving and handling consumer complaints in all the markets that we regulate. Currently, we are handling complaints about mortgages, credit cards, auto loans, student loans, bank account products, payday loans, consumer loans, debt collection, credit reporting, and money transfers. I know that many of you, as we did when I served as the Ohio Attorney General, have devised your own ways of handling constituent concerns. It often is just a matter of happenstance whether consumers turn to your offices or to ours to seek help with their problems, and we believe we can jointly manage these matters better and more productively if we share information and consider pooling our efforts.

So we have begun working with several states to give them real-time access to our growing database of consumer complaints. Just last month alone we received more than 30,000 calls and handled more than 20,000 complaints from consumers. They come from people in each of your states. We have found that collecting, investigating, and resolving consumer complaints is an integral part of our work. It allows us to address many problems for hard-pressed consumers.

Some of these complaints rise to the level of violations of federal consumer financial law. So our complaint process serves people who otherwise would have to invoke the legal process or, much more likely, just have to lump it and absorb the injustice. Other complaints may not state a legal violation but nonetheless highlight important concerns affecting consumers. In this way, the complaint process helps consumers tell us exactly what is bothering them, in real time, which we use to prioritize our supervision and enforcement efforts. Because we are now able to provide complaint information to state agencies through a secure government portal, you can review complaints and even search and filter them by company, product, or issue.

The California, Virginia, Oregon, and Texas Attorneys General are already partnering with us on these efforts, as are the banking regulators in fourteen states. I strongly urge the rest of you to join us and do the same. If you want to know what your constituents are saying about the problems they face in the consumer financial marketplace, our government portal makes it extremely easy to do that. We want every attorney general to take advantage of this technology, which will help us see things through the same eyes and find new opportunities to serve consumers more effectively.

Furthermore, when consumers come to you to make a complaint or enforce their rights, they may also have questions about consumer financial products or services. That is why we developed our Ask CFPB tool. We have more than one thousand answers to questions that consumers frequently ask about mortgages, credit cards, payday loans, credit reporting, debt collection, and other categories. Over one million consumers have visited the site so far, and we invite you to add a link to the Ask CFPB feature on your websites.


The most obvious basis for us to collaborate is where we share the same tools and approach to enforcing the law – through investigations and lawsuits. To date, this collaboration has yielded some excellent and historical results.

The Consumer Bureau joined forces with state attorneys general in New Mexico, North Carolina, North Dakota, Wisconsin, and Hawaii to refund money to consumers who were unlawfully charged advance fees for debt settlement services by the company Payday Loan Debt Solutions. In a matter where a large residential developer was bilking purchasers, we teamed up with the Kentucky Attorney General to reach positive results.

In our current lawsuit against the online loan servicer CashCall, we have been coordinating with Arizona, Arkansas, Colorado, Indiana, Massachusetts, New Hampshire, New York, and North Carolina, and other states are getting involved as well.

In our enforcement action against GE CareCredit for deceptive enrollment in health care credit cards, we were able to build on outstanding work that had been done on a statewide basis by the New York Attorney General’s office.

And we just concluded a matter where we worked closely with 49 states and the District of Columbia to file a court order requiring Ocwen, the nation’s largest nonbank mortgage servicer, to provide $2 billion in principal reduction to underwater borrowers. In that order, we also secured $125 million in refunds to borrowers who had been subject to foreclosure. To achieve this outcome, we teamed up with both state attorneys general and state banking superintendents in a massive intergovernmental joint venture that will benefit many, many consumers.

But this is just a list of some of the specific cases we have worked on thus far that have resulted in public filings. Actually our teamwork is much more deeply embedded. Not a day goes by at the Consumer Financial Protection Bureau without some of my colleagues speaking with, meeting with, or working with members of your teams.

Sometimes our specific authority over federal consumer financial law works better to address issues, and sometimes your consumer protection authorities under state law can more effectively clean up illegal activity that may go beyond the provision of consumer financial products and services. We frankly do not care what color uniform the prosecutor is wearing, as long as the bottom line is that we enforce the law vigorously and make things right for consumers.


Let me also speak to another aspect of the work that attorneys general do, which is to serve as a catalyst for broader reforms. In addition to investigations and enforcement actions, which are tools we share with you, our statutes also provide us with the supervisory authority to examine financial institutions for compliance with the law. And we have the ability to write new rules that create substantive law governing the operations of consumer financial markets. It is striking to me just how extensively the experience and perspective of attorneys general have been and will be informing these initiatives.

Take as a notable example the mortgage servicing market. From the beginning of the financial crisis, the attorneys general have led the charge in addressing servicing abuses and assisting borrowers. It all started with the early multi-state cases against servicers, your various home preservation programs, and the collaboration of the NAAG multi-state foreclosure group. That work eventually culminated in the national mortgage servicing settlement and many progressive new state laws and regulations. Throughout this period, you have been on the forefront seeking relief and helping gain tens of billions of dollars in assistance and direct relief for homeowners nationwide. You also imposed new terms and conditions on how the five largest servicers must conduct their business for a period of several years.

At the same time, the Dodd-Frank Act that created the new Consumer Bureau also authorized us to write new rules to clean up the mortgage servicing market. Where did we go when we set about writing these rules? Naturally enough, we took a close look at what we could learn from many years of work that you and your teams had already been doing in the mortgage servicing space. And we learned plenty.

All of that consideration has now borne fruit in a new regulatory regime. This regime will govern the mortgage servicing market – including both the banks and their nonbank competitors – in perpetuity. And the Consumer Bureau has both supervisory authority and enforcement authority to make these rules stick and ensure that servicers must comply with them. These changes will usher in a new era of fundamental reforms in mortgage servicing.


Debt collection is another example that shows how your work reverberates. For decades, the attorneys general, along with the Federal Trade Commission, have been at the forefront of fighting unfair and deceptive practices by debt collectors. Back when I was the Ohio Attorney General, we found that these investigations and lawsuits came thick and fast, because consumers were constantly crying out against the many abuses to which they were subjected by some unscrupulous debt collectors.

Interestingly, this market is one that attorneys general know backward and forward, because most attorneys general not only oversee the activities of debt collectors in their states, but they are also debt collectors themselves. When you collect debts owed to the state government, or to state universities, you learn as I did that this work can and should be done the right way. But you also come to understand the many financial pressures that can lead debt collection companies and their employees to do things the wrong way. You see first-hand how some people are tempted to engage in indefensible practices just to squeeze whatever they can out of debtors, regardless of the ethics and regardless of the harm done.

Under the Dodd-Frank Act, the new Consumer Bureau was given authority for the first time ever to develop rules to implement the Fair Debt Collection Practices Act, which was enacted in 1977 – the year I graduated from high school. Right now, we are in the early stages of preparing possible proposals, which could lead to the most significant changes in federal law in this area in 37 years. Those years have not been uneventful for our society and for debt collection: they have witnessed the evolution of computers, the proliferation of telephone answering machines, the coming (and going) of fax machines, the birth of the Internet, the rise of email, and the advent of cell phones, blackberries, and smart phones.

As you can see, we face an immense task. And where should we look for guidance about how to handle that task? We decided, right away, to seek input from attorneys general and your teams. Very few policymakers can sit down and sketch a unified theory of the universe that actually fits the world around us. Better insight comes from those doing the relevant work, who can speak from experience. So we put out an Advanced Notice of Proposed Rulemaking and later extended the deadline for comments so we could get more input from you and others. I am glad to know that you will guide us, and advise us, as we carry out this overhaul of federal debt collection law. The results will be better informed, and more balanced, because you are in a position to counsel us in our efforts.


In these ways and others, your thoughtful and energetic work is spurring national reforms. That is especially the case through your partnership with us. Although financial issues can be highly complex, what we are both seeking really is not. Our job is simply to work together to help create a consumer financial marketplace that works for consumers and honest businesses alike.

To this end, we have several other ongoing efforts where we are jointly engaged in protecting American consumers. One concern that is widely shared by state attorneys general is online lending that is pursued in violation of state or federal law. We all know that law enforcement in cyberspace poses some difficult challenges. We have made the commitment to work together to find ways to make sure that technology serves consumers and does not create the means of circumventing compliance with the law.

Another area of mutual engagement is unfair and deceptive marketing practices by for-profit colleges. This is a matter of utmost importance to our nation. Tens of billions of dollars are being spent every year on these institutions, and we are hearing widespread complaints about the serious gap between promises and reality. Our next generation of leadership in this country is being diverted or held back by their student loan burdens, which are made even worse if they are the victims of exploitative lending practices. We will have more to say later today about some of the specific activity we are undertaking here in coordination with a number of attorneys general.


Three years ago, I first came here as a new member of SAGE and as a new employee of the Consumer Financial Protection Bureau. We only had six people on our enforcement team then, as we were just beginning to build this new agency. Now I am already able to speak at length about the crusades we are undertaking together to improve life for American consumers. Let me say that it feels just great to be your partner. As Henry Ford once said, “Coming together is a beginning; keeping together is progress; working together is success.” Thank you.

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit