“[I]t is notable that we are the first federal agency authorized to supervise non-bank players such as mortgage originators, mortgage servicers, payday lenders and private student lenders,” Cordray said. “We can also supervise ‘larger participants’ in other non-bank markets. There are tens of thousands of these non-bank firms, and their products affect virtually every American.”
Cordray cited industry statistics to illustrate the larger role of non-bank firms in the lives of American consumers.
“[A]ccording to studies and industry sources, non-bank lenders originated almost two million mortgages in 2010, nearly 20 million consumers used payday loans, over 30 million people are being pursued by debt collectors, and roughly 200 million Americans rely on credit reporting agencies to report their credit histories accurately,” Cordray said.
Additionally, Cordray cited the housing collapse as one example of the shortcomings of the current framework.
“Banks, thrifts, and credit unions were subject to explicit oversight, whereas many other mortgage market participants, such as lenders and brokers and originators, were held to no standards of accountability at all,” Cordray said.
Cordray also said that the agency is working to create a supervised, transparent marketplace.
“We envision a consumer finance marketplace where we can see prices and risks up front; where we can compare the pros and cons of different products; and where no one can build a business model around unfair, deceptive or abusive practices,” Cordray said. “Our job is to see that people are treated fairly in this marketplace, and that someone is standing on their side if they are not. Our mission is to see that these markets work for American consumers, honest businesses and the economy as a whole.”