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New consumer watchdog chief faces skeptical Republicans

Richard Cordray, head of the Consumer Financial Protection Bureau, told lawmakers Tuesday that he would not abuse his power and promised that the agency would take action only against companies that break the law.

"It is not our intention to start going off and acting like we're some sort of mini-Congress, just doing anything we think is good and right," Cordray told members of a House Oversight and Government Reform subcommittee.

Facing lawmakers for the first time since his controversial recess appointment Jan. 4, Cordray tried to allay fears of congressional Republicans that the powerful new agency would add to the uncertainty felt by many businesses about Washington regulations.

Republicans and business groups have questioned the legality of President Obama's decision to install Cordray during a brief Senate recess, and lawsuits are expected challenging the appointment.

Rep. Patrick McHenry, R-N.C., the subcommittee chairman and a strong critic of the consumer bureau, said Obama's actions only increased the trepidation of financial firms about the agency.

"If having a regulator with unprecedented and ill-defined power was not enough, the administration decided to double down by bringing into question the validity of its director," McHenry said. "That's unfortunate."

Democrats defended the recess appointment, which they said was required because Senate Republicans were blocking Cordray's confirmation.

Rep. Frank Guinta, R-N.H., made it clear he would have preferred the agency not exist. He asked Cordray why the agency was not adhering to Obama's freeze on government hiring.

Cordray said the agency was new and needed to hire to get working. Cordray noted that if the agency had adhered to the freeze, it would still have zero employees instead of the approximately 757 it now has.

"I wouldn't object to you being at zero," Guinta said.

But Cordray scored points with McHenry and some other lawmakers by giving a detailed answer to a question about the responsibilities of consumers in the financial marketplace. Rep. Trey Gowdy, R-S.C., had expressed frustration during a hearing last year when former Obama administration adviser Elizabeth Warren, who helped launch the bureau, had not answered the question directly.

"People have to be responsible for their decisions," Cordray said. "The thing that the bureau can do is make sure the decisions they're faced with are as clear and transparent as possible and if they make a bad deal, they'll have to live with it.'

"Nobody's going to wave a magic wand and undo personal responsibility," Cordray said.

Gowdy responded, "May the record reflect Mr. Cordray answered the question."