House Mulls Contempt Charges for CFPB Director

On the heels of passing a bill that would severely curtail the authority of the Consumer Financial Protection Bureau (CFPB), House Financial Services Committee Chairman Representative Jeb Hensarling (R- TX) is considering holding CFPB Director Richard Cordray in Contempt of Congress for the failure to release documents to Congress related to the 2013 investigation into Wells Fargo and the bank’s fradulent creation of nearly 2 million unauthorized bank accounts for customers. An in-depth report by House staff detailed the CFPB’s repeated refusal to provide the House committee with even one internal document related to the investigation. As the report reads, documents related to the investigation are needed for the House committee to complete its review of the matter. As it stands, direct testimony by Director Cordray is currently contradicted by documents supplied by Wells Fargo and the Office of the Comptroller of the Currency.

If charges are brought against Cordray, a contempt charge in Congress could accompany a fine of $100,000 and up to one year in prison, but that would also require a prosecution from the Department of Justice. Even without contempt floating over his head, Cordray’s position remains tenuous. The D.C. Circuit Court recently heard arguments on the constitutionality of Cordray’s position. His appointment by President Obama is also actively being questioned in federal court and Congress. On June 8th, the House voted to strip the CFPB of most of its authority originally granted under the Dodd-Frank Act, although those changes will still require Senate approval. The future of the CFPB under Cordray’s leadership is hanging in the balance.