Bad actors in lending sector under scanner

Washington: In his first full day as chief of the Consumer Financial Protection Bureau, Richard Cordray sought to lower the political heat around the US agency, saying it would earnestly get to work targeting all the bad actors in the lending industry.

Cordray's remarks followed a day of bitter partisan sniping among Democrats and Republicans over President Barack Obama's controversial decision to install him as the CFPB's first director through a recess appointment.

At an event on Thursday hosted by the Brookings Institution, a Washington think tank, Cordray said those tensions and questions over the legality of his appointment are for others to worry about.

He is moving forward, full steam ahead. "We are determined to deliver positive results for American consumers," he said.

Cordray said his agency would immediately begin regulating payday lenders, mortgage servicers, private student lenders and other businesses in the ‘shadow banking' industry.

"We must establish clear standards of conduct so that all financial providers play by the rules," Cordray said.

Due to a quirk of the 2010 Dodd-Frank financial oversight law, which created the CFPB, the bureau could regulate banks but not other lenders until a director was in place.

Republicans had blocked Cordray's nomination, demanding structural changes to the agency, which they portray as a virtually unchecked government body that will hurt lending and put small banks out of business.

Democrats have heralded the bureau, which opened its doors in July 2011, as a way to protect consumers from abusive lending practices.