House Financial Services Chairman Jeb Hensarling (R-Texas) and House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) told CFPB Director Richard Cordray they are concerned about former Deputy Director Raj Date and other former CFPB senior employees’ alleged profiting off the rules they helped create.
The two GOP leaders fired off a letter Aug. 1 detailing their unease with Date’s new advisory and investment firm that would securitize mortgages that don’t meet qualified mortgage standards.
Since Date left the CFPB in March, two months after the QM rule was finalized, several other senior employees have joined his firm, the two congressmen said in a release. Witnesses at recent congressional hearings exploring the rule’s impact have said as many as half of today’s mortgages would not meet QM standards. The rule goes into effect Jan. 10, 2014.
“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 two said in the letter.
“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 said. “We are deeply concerned that this close relationship between the CFPB and its former officials ultimately could harm consumers.”
The document is also signed by Rep. Shelley Moore Capito (R-W.V.), Rep. Patrick McHenry (R-N.C.) and Rep. Jim Jordan (R-Ohio), all chairmen of congressional subcommittees.
The letter also alleges that the CFPB’s lack of transparency incentivized Date and the other former employees to “create a cottage industry unique to the Bureau’s regulatory agenda.”