Exclusive - Richard Cordray Extended Interview Pt. 1

  • Aired:  01/08/14
  •  | Views: 51,563

In this exclusive, unedited interview, Consumer Financial Protection Bureau director Richard Cordray champions meaningful regulation for the financial industry. (5:26)

[CHEERS AND APPLAUSE]>> Jon: WELCOME BACK.

MY GUEST TONIGHT IS THE DIRECTOROF THE CONSUMER FINANCIAL

PROTECTION BUREAU.

PLEASE WELCOME TO THE PROGRAMRICH CORDRAY.

[CHEERS AND APPLAUSE]THANK YOU VERY MUCH FOR BEING

HERE.

YOU ARE THE DIRECTOR OF THECONSUMER BUREAU OF COMMERCE AND

ALCOHOL, TOBACCO AND FIREARMS.

WHAT IS THE NAME?

>> IT'S THE CONSUMER FINANCIALPROTECTION BUREAU.

OUR JOB IS TO SEE THAT PEOPLEARE TREATED FAIRLY IN THE

MARKETPLACE.

IT'S AN IMPORTANT JOB, I THINK.

>> Jon: GOOD LUCK WITH THAT.

[ LAUGHTER ]THEY NOMINATED YOU.

YOU WERE CREATED THROUGH THEDODD FRANK REFORM.

WHEN DID THEY NOMINATE YOU?

>> JULY OF 2011.

>> Jon: WHEN DID YOU BECOMETHE HEAD OF BOARD?

>> IN JANUARY BUT CONFIRMED TWOYEARS AFTER I WAS NOMINATED IN

JULY OF 2013.

>> Jon: AND DID THAT SEND YOUTHE MESSAGE THAT THIS IS GOING

TO BE GREAT?

>> I DIDN'T KNOW WHETHER TOTHINK IT WAS FAST OR SLOW.

>> Jon: I CAN ASSURE YOU IT'SNEVER HAPPENED THAT QUICKLY

BEFORE.

[ LAUGHTER ]NOW YOU ARE DEALING WITH THESE

IDIOTS.

[LAUGHTER]SO WHAT I HAVE YOU -- YOU GET TO

THE OFFICE.

THE FIRST THING YOU DO ISWORK ON FAIR LENDING.

IT'S THE IDEA THAT MORTGAGECOMPANIES, CHARTERED AND

NONCHARTERED HAVE TO MAKE SURETHAT THE CONSUMER CAN AFFORD THE

MORTGAGE THAT THEY ARE GIVEN,CORRECT?

>> IT'S PRETTY BASIC STUFF.

THERE SHOULD NOT BE DEBT TRAPSPEDDLED TO THE AMERICAN PEOPLE

THAT HAPPENED LEADING UP TO THEFINANCIAL CRISIS.

THEY SHOULDN'T BE RUN INTOSURPRISES AND GET THE RUN AROUND

WHEN THERE'S A PROBLEM.

WE SAW IT HAPPENING AND IT'STIME TO STOP.

>> Jon: HAS THERE BEENPUSHBACK FROM THE INDUSTRY?

WHAT IS THE RESISTANCE?

THERE HAS BEEN.

IT'S A BIG CHANGE IN THE STATUSQUO.

THERE'S ALWAYS RESISTANCE.

THESE ARE SENSIBLE CHANGES.

THIT'S TAKING MORTGAGE LENDINGBACK

TO WHAT CREDIT UNIONS HAVE DONEFOR DECADES.

CHECKING OUT THE NUMBERS TO MAKESURE PEOPLE CAN SUCCEED IN THE

LOAN AND NOT JUST GIVEN THEM THELOAND AND NOT CARING IF THEY

FAIL.

IF THEY ARE UNDERWRITTEN FOR ATEASER RATE PRETENDING IT'S THE

LIFE OF LOAN.

>> Jon: AFTER TWO YEARS THE>RATE DOUBLE AND THEY WON'T BE

ABLE TO AFFORD IT ANYMORE.

>> Jon: THERE'S ANOTHER PIECETO THIS AND THAT IS MORE

PUNITIVE.

YOU ARE GOING AFTER MORTGAGELENDERS FOR POOR BEHAVIOR.

WHAT IS THAT?

>> WE HAVE AUTHORITY AND WE'VEBEEN USING IT IN A NUMBER OF

DIFFERENT MARKETS.

CREDIT CARDS YOU SIGN UP FORCREDIT CARD YOU CALL TO

ACTIVATE IT.

OFTEN THEY ARE TRYING TO SELLYOU OTHER PRODUCTS.

SOME SOUND LIKE THE PRODUCTS YOUSHOULD GET IDENTITY PROTECTION.

YOU AGREE YOU AREGOING TO PAY TEN DOLLARS

A MONTH. THEY DON'T TELL YOUTHERE'S ANOTHER STEP OR TWO.

THEY CHARGE $10 AMONTH, MONTHS LATER WHEN

THEY GO TO SEEK THE PROTECTIONTHEY SAY YOU DIDN'T HAVE IT.

YOU KNOW IT'S WRONG.

TOTALLY UNFAIR AND WE'VE BEENGETTING HUNDREDS OF MILLIONS

BACK FOR CONSUMERS IN THEIRPOCKETS BECAUSE THEY WERE

MISTREATED IN THIS WAY.

>> Jon: THE THING I DON'TUNDERSTAND ABOUT THE PUNITIVE

MEASURES AGAINST THE FINANCIALINDUSTRY IS IT ALWAYS OPERATES

UNDER THE PRINCIPLE OF ALL RIGHTWELL JUST GIVE US A CUT OF IT.

GIVE US MONEY BACK.

DOCTORS CAN LOSE THEIR MEDICALLICENSE.

LAWYERS CAN BE DISBARRED.

WHEN YOU COMMIT FRAUD AS ANINDIVIDUAL, YOU GENERALLY HAVE

TO GO SOMEWHERE WHERE YOU CAN'TLEAVE.

[ LAUGHTER ]WHY IS IT THAT WITHIN THE

FINANCIAL INDUSTRY THOUGH ANYENFORCEMENT IS ALL RIGHT YOU

DON'T HAVE TO ADMIT YOU DIDANYTHING WRONG BUT CAN WE AT

LEAST HAVE -- I DON'T KNOW --10% OF IT?

WHY CAN'T WE DO MORE?

>> I AGREE WITH YOU.

THAT'S GOING TO BE OUR APPROACH.

PART IS ABOUT GETTING MONEY BACKTO CONSUMERS WHEN THEY WERE

WRONGED.

THEY SHOULD GET THEIR MONEYBACK. PART OF IT ABOUT IS

IMPOSING PENALTIES AND PART ISABOUT FIXING THE PROBLEM GOING

FORWARD SO THEY CAN'T DO THESAME THING OVER AGAIN BUT

COMPANIES ARE NOT THE ONLY ONESWHO ACT.

THERE'S ALWAYS OFFICIALS ANDPEOPLE IN THE COMPANY THAT MAKE

THE DECISIONS.

SO GOING AFTER THEM FOR MONEY,MAKING THEM FEEL AT RISK.

SOMETIMES GOING AFTER THEM TOTAKE THEM OUT OF BUSINESS FOR A

PERIOD OR REFERRING THEMCRIMINALLY.

>> Jon: IF YOU WERE TO BEHAVE>> IN A FRAUDULENT MANNER INE

ANOTHER BUSINESS, YOU WOULDLOSE YOUR LICENSE TO

PERFORM THAT BUSINESS.

BUT IT DOESN'T SEEM TO OCCUR.

WHAT IS MORE INTERESTING IS THEYGET BAILED OUT.

CONSUMERS DON'T BECAUSE OF MORALHAZARD.

CAN'T BAIL OUT A CONSUMER WHOMADE A BAD DECISION ON A LOAN

BECAUSE IT TEACHES THEM THEWRONG LESSON.

>> THAT IS WHAT HAPPENED BEFORETHE CRISIS AND THE WHOLE

ECONOMIC SYSTEM WAS IN PLACE.

I WASN'T IN WASHINGTON AT THETIME.

MY UNDERSTANDING -- THIS IS THEIDEA ELIZABETH WARREN HAD A FEW

YEARS AGO.

LONG OVERDUE.

MY JOB IS TO MAKE SURETHIS AGENCY LIVES UP

TO THAT PRINCIPLE.

>> Jon: YOU ARE LIKEELLIOT NESS WITH A BASEBALL BAT.

I SEE YOU IN THAT ROLE.

WILL YOU STICK AROUND?

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