GOP Report: Lawmakers Should Consider Holding CFPB's Cordray in Contempt

By Yuka Hayashi Features Dow Jones Newswires

A Republican staff report released Tuesday recommends that lawmakers take action against Consumer Financial Protection Bureau Director Richard Cordray, including holding him in contempt, saying he didn't cooperate with an investigation into the Wells Fargo & Co sales practices scandal.

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Republican staff for the House Financial Services Committee alleged that Mr. Cordray didn't comply with the committee's request for records to help its probe. The goals of the congressional investigation is to determine the roles of bank executives and regulators in allowing Wells Fargo employees to engage in the practice of opening phony accounts without customer consent.

"Due to CFPB Director Richard Cordray's failure to honor his legal obligation to produce all records responsive to the committee's subpoena, the committee's Wells Fargo investigation is at an impasse. Key questions remain unanswered," the report said. It recommended that lawmakers take steps "up to and including preparing for possible contempt proceedings against director Cordray should they prove necessary."

House Republicans have long accused the CFPB of what they see as regulatory overreach, and have proposed significantly curtailing the bureau's authority. White House officials also have expressed a desire to remove Mr. Cordray, whose term expires next summer, but are unable to do so because the president can only fire the CFPB director for cause.

The report recommended that House Financial Services Chairman Jeb Hensarling (R., Texas) issue subpoenas to CFPB employees to jump-start the panel's investigation as a first course of action before considering contempt proceedings.

A CFPB spokesman said the bureau is reviewing the committee's report.

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"Director Cordray has provided a public account of the timeline on which our investigation unfolded, and our order publicly details our findings against Wells Fargo," the spokesman said. "The CFPB's enforcement action not only put a stop to Wells Fargo's illegal practices, but it has generated much follow-on enforcement activity."

Congress has the authority to hold a government official in contempt if the person's conduct obstructs a committee's inquiry. If held in contempt, the person could be convicted of a misdemeanor.

Republicans in September began investigating the Wells Fargo affair, and requested volumes of data from the bank, the CFPB and the Office of the Comptroller of the Currency, another federal regulator overseeing the bank.

The GOP report said that while the bank and the OCC have "cooperated in full" with the committee, the CFPB didn't do so.

Write to Yuka Hayashi at yuka.hayashi@wsj.com

(END) Dow Jones Newswires

June 06, 2017 18:59 ET (22:59 GMT)