CFPB Chief Cordray Fires Back at GOP Lawmaker Over Wells Fargo Probe

By Yuka Hayashi Features Dow Jones Newswires

A fight between the head of the Consumer Financial Protection Bureau and a senior Republican lawmaker escalated this week as the CFPB chief made a sharp rebuttal to a GOP report that criticized the agency's role in investigating alleged sales misconduct at Wells Fargo & Co.

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In a five-page letter sent to Rep. Jeb Hensarling (R., Texas), chairman of the House Financial Services Committee, CFPB Director Richard Cordray disputed claims by committee staff that the agency failed to conduct an "independent and comprehensive" investigation of Wells Fargo. He also contested the committee Republicans' assertion the CFPB failed to cooperate with their own probe into the matter.

The rebuttal comes in response to a June 6 report by committee staff that recommended lawmakers take action against Mr. Cordray for what the report called his failure to submit subpoenaed records, including holding him in contempt.

In his letter dated Wednesday, which was reviewed by The Wall Street Journal, Mr. Cordray wrote the report "devolves into various misstatements and allegations" about the bureau's cooperation with the committee, instead of focusing on how the CFPB and other regulators successfully ordered Wells Fargo to halt alleged misconduct and make harmed consumers whole.

"The staff report suggests that the consumer bureau, and I myself, refused to brief committee staff about the work we did on these matters, " Mr. Cordray wrote. "That is not what happened, and the staff report selectively mentions only some of the communications."

Mr. Cordray said the bureau has submitted 57,000 pages of records, not 1,010 as the staff report claims. He denied a GOP complaint that he and CFPB officials refused to brief committee staff and lawmakers about their work, saying their offers to do so were ignored in some cases. One example, Mr. Cordray said, was when he offered in September to testify at a hearing of the House committee after addressing the Senate Banking Committee on the CFPB's work on Wells Fargo.

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Long critical of the CFPB, Mr. Hensarling and other committee Republicans say the agency joined the Wells Fargo investigation late and piggybacked on work done by Los Angeles city investigators. Legislation spearheaded by Mr. Hensarling that recently passed the House includes steps to roll back postcrisis financial regulations and curb the CFPB.

Jeff Emerson, Mr. Hensarling's spokesman, said the committee continues to wait for Mr. Cordray to submit all requested information. "If Director Cordray truly wishes to correct the record, he should stop ignoring his legal obligations. What is he trying to hide?"

The committee's Democrats have said Republicans have excluded them from investigating the case or compiling reports.

"This report is an insult to the millions of Americans who were harmed by Wells Fargo," Rep. Maxine Waters of California, the top Democrat on the committee, said in a statement. "Republicans have been clamoring to weaken, impede, and ultimately destroy the consumer bureau since its creation."

Mr. Cordray said the bureau's investigation was comprehensive. "In my mind it was, in the sense that it thoroughly canvassed the factual and legal issues at stake," he said. "We conducted our inquiries to satisfy our independent obligation to determine that Wells Fargo had in fact violated federal law..."

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

(END) Dow Jones Newswires

June 16, 2017 18:33 ET (22:33 GMT)