The House Financial Services Committee and Oversight and Government Reform Committee recently sent a letter last week to the CFPB expressing concern that senior employees have left the agency to profit from the rules they helped create.
The letter, which was signed by HFSC Chairman Jeb Hensarling and Darrell Issa, the chairman of the oversight and reform committee, requested additional information related to the departure of Raj Date, Gary Reeder, Chris Haspel and Mitch Hochburg, as well as their continuing relationship with the agency.
“While serving in senior leadership positions within the CFPB, Mr. Date, Mr. Reeder, Mr. Haspel and Mr. Hochburg helped to write a series of rules broadly affecting mortgage lending in the United States,” the lawmakers said in the letter, referring to the CFPB’s qualified mortgage/ability-to-repay rule, which prohibits a creditor from making a loan without examining a consumer’s ability to repay the loan.
Hensarling and Issa said Date, the former deputy director of the CFPB, left the agency after the CFPB’s issuance of its final QM rule with “’no current plans for his career after the CFPB, other than to spend more time with his family.’”
In March, Date incorporated Fenway Summer, an advisory and investment firm, that seeks to help borrowers who do not meet the CFPB’s QM standards. Date hired Reeder, Haspel, Hochburg and other CFPB employees to the firm.
The lawmakers said the CFPB’s lack of transparency “has apparently incentivized Mr. Date and other CFPB alumni to create a cottage industry unique to the Bureau’s regulatory agenda.”
“Simply put, it appears that former CFPB employees are now offering financial products in a market sector created by the very rules they were in a position to influence while working in senior leadership positions at the CFPB,” the letter said. “This conduct raises serious questions about the integrity of the CFPB’s rulemaking process and the conduct of some of its most senior former officials.”
The letter requests information related to communications between Date, Reeder, Haspel or Hochburg and other CFPB officials on the QM rule; data on the CFPB’s attrition rates; and communications between Date and any CFPB employee pertaining to the creation of Fenway.
Signatories to the letter also included Rep. Jim Jordan (R-Ohio), Shelley Moore Capito (R-W. Va.), Patrick T. McHenry (R-N.C.).