Fannie Mae Executive Could Lead CFPB

Category: Rules and Regulations

A Fannie Mae executive could be the next director of the Consumer Financial Protection Bureau (CFPB), should the Trump Administration decide to replace Richard Cordray, reports HousingWire. The article reports that Republican lawmakers are pushing for a leadership change at the regulatory organization, with Brian Brooks, general counsel at Fannie Mae, said to be on the directorship shortlist.

Brooks and Mnuchin share OneWest ties

According to the article, Brooks has “close ties” to Steven Mnuchin, President Trump’s nominee for Secretary of Treasury. Brooks reportedly represented investors in the purchase of the assets of a troubled subprime mortgage lender in 2009. When that lender was reformed as OneWest Bank, Mnuchin reportedly served as chairman and Brooks served as vice chairman.

Court ruling, proposed legislation could lead to Cordray’s replacement

Cordray, current head of the CFPB, has served in that role since the organization’s formation in 2012. As an independent regulatory agency, the Dodd-Frank legislation that created the CFPB prohibits replacing the CFPB director at will. However, the article reports several factors could impact Cordray’s continuance in the role.

The CFPB and PHH, a mortgage lender, have been locked in litigation since 2015 over a $100 million fine imposed by the CFPB on PHH. In the latest court battle, an appeals court found the structure of the CFPB’s leadership unconstitutional. According to the article, that decision makes Cordray fireable at will, though the ruling is being appealed.

Across town, House Financial Services Committee Chairman Jeb Hensarling, R-Texas, has reportedly released a memo detailing new legislation, the Financial CHOICE Act, which would repeal and replace Dodd-Frank legislation. That memo reportedly would introduce legislation that would also make the CFPB director position fireable at will.

Posted on: Wednesday, February 15, 2017