Cordray’s nomination as CFPB’s head still hangs in suspense
A couple of weeks ago, a new and simpler credit card agreement have been initiated by the Consumer Financial Protection Bureau (CFPB) of US President, Barrack Obama. This 2-page agreement was introduced with the expectation that banks would adapt it willingly. However, objections were raised at the White House for its current initiative to protect customers. High risks are being predicted by the Republicans that might affect the American economy as well as the entire nation.
The Consumer Financial Protection Bureau brought in the new credit card agreement with the intention to gain wider support. Well, the Republicans raised questions on the power and existence of CFPB since the Dodd-Frank Wall Street Reform Act gave rise to this agency. Keeping into mind the impending consequences, Alabama’s Richard Shelby being a Republican Senator and the Senate Banking Committee’s topmost Republican heavily criticized the bureau.
Along with forty other Republicans, Shelby issued instructions that no single individual will be assigned as the agency’s head. He had had fears that such a person might not rightly utilize his powers. Rather, the aftereffects might be dangerous. Shelby concentrated on the fact that the Bureau must ensure that its actions are accountable for all Americans, and then only millions of dollars would be spent to form a new federal government agency. Shelby informed Obama that they will not allow anyone to become the first Director unless the Bureau stands accountable for the people of America.
To be specific, the Republicans have turned nervous with the thought that the newly created agency might entertain unreserved powers over several financial organizations. In fact, there are fears that the regulations can be even pricey that can further affect the growth of employment. Well, Shelby cannot assure that the credit card agreement can pose threats. Rather, several credit card issuers like Bank of America and JP Morgan Chase have shown positive responses towards the idea.
On the contrary, Kenneth Clayton, the Chief Counsel of the American Bankers Association opined that simpler credit card agreements can bring higher risks of law suits as well as other liabilities. He says that the model initiated by the Bureau is no doubt a good attempt but can be made shorter. It should have lesser propensity towards risks related to lawsuits. Despite, it’s not easy for anyone to understand the credit card agreements, and the Obama administration is well aware of it.
As a result, the announcement for the new credit card agreement was made the same week when President Obama’s team raised objections in nominating Richard Corday as CFPB’s head. Well, the White House is expecting the Senate to assure Cordray’s nomination.
