1. The CFPB has been conspicuously quiet this week. As a result, this week’s update will read more like a gossip column—a nerdy gossip column. For those of you who have received a CID or first day letter from the CFPB, you may appreciate the fact that the CFPB received document requests from two Congressional Committees. On July 31, 2013, the Chairs of the House Financial Services and the Oversight and Government Reform Committees sent a letter to Director Cordray. In the letter, which can be found here, House members Darrell Issa, Jim Jordan, Jeb Hensarling, Shelley Moore Capito and Patrick McHenry express their concerns about the fact that former CFPB senior employees, Raj Date, Gary Reeder, Chris Haspel and Mitch Hochburg recently left the CFPB to form their own consulting firm. The consulting firm advises clients with respect to the mortgage rules that the CFPB wrote while Messrs. Date, Reeder, Haspel and Hochburg were senior employees at the CFPB. In the letter, the House members state, in part, “[o]ur Committees are not alone in their concerns regarding the appearance of impropriety in Mr. Date's planned activities for [the consulting firm]. Richard Painter, a former White House ethics officer, characterized [the consulting firm] as ‘an extortion racket’ that ‘hires alumni of the agency and they'll call up their buddies in the agency to call off the dogs.’” The House Committee Chairs conclude the letter by asking for documents, in electronic format, from the CFPB, by 5:00 p.m. on August 14, 2013.
All. documents and communications between Mr. Date, Mr. Reeder, Mr. Haspel or Mr. Hochburg and any other official at the CFPB referring or relating to the drafting of the qualified mortgage rule between February 17, 2011, and the present;
All documents that provide an accounting of the CFPB's attrition rates on an annual basis, including the name of the departing employee, the departing employee's new employer, and the date of departure, between July 21, 2010, and the present;
All ·documents and communications between Mr. Date and any CFPB employee or agent referencing or relating to the conception, design, or mission of Fenway Summer, between February 17, 2011, and the present; and
All documents and communications between any partner or employee of Fenway Summer LLC and any CFPB employee or agent between March 11, 2013, and the present.
I wonder if the CFPB will file a petition to set aside or quash the document requests and demand that Director Cordray preside on the issue of whether the petition should be granted like he would under the CFPA…. On a more serious note, some may say that the House members have a point, and the former CFPB senior employees should not profit off of the rules that they helped create. But if you feel that way, then how do you feel about people leaving government jobs all of the time (SEC, CFTC, DOJ) for jobs in the private sector where they play up their experience with a regulator to land prestigious high paying jobs? Do House Committees send letters and demand documents from the other departed agencies as well? I do not think so, but I must admit that I am not certain.
That is all for this week. Please do not forget that all of our prior updates are on our website, www.cfpaguide.com/weeklyupdates.