Richard Cordray, the Obama-era director of the Consumer Financial Protection Bureau, announced Wednesday he plans to resign by the end of the month, before his regular term expires.

The CFPB was created as part of the Dodd-Frank financial overhaul with a mandate to protect consumers in their dealings with the banking and financial-services industries.

But critics, including President Donald Trump and many Republicans in Congress, have argued that as an independent agency, the bureau has overstepped its authority in assessing fines and created hurdles that make it more difficult for Americans to access loans and other services.

It’s unclear whether the White House will attempt to restructure the CFPB, which would require Congressional legislation. But a new acting commissioner appointed by President Trump may be enough to change the tone and direction of the agency, some consumer advocates worry.

“The acting director may be less aggressive in advocating for consumers and instead try to work with a framework that is more favorable to businesses,” says Lisa Donner, executive director of Americans for Financial Reform, a nonprofit coalition of consumer and other citizen groups.

In the near term, Cordray's departure raises questions about the CFPB's newly issued payday loan rules designed to improve protections for consumers. The regulations were about to be published in the Federal Register, which would make them law.

Under a new acting commissioner, those rules could be delayed or overturned, perhaps by pulling them back or by not contesting an effort by Congress to repeal them.

More on the CFPB

Consumer advocates also worry that access to the bureau's Consumer Complaint Database, which holds records of more than 1 million consumer grievances, could be restricted under new leadership.

The data are currently available to any consumer who wishes to make a complaint against a financial-services company that falls under the CFPB's oversight. The bureau has tapped that information to identity trends of consumer abuse. Consumers also could research the track records of financial-services companies.

“It could be a death by 1,000 cuts—responses could be slower and transparency may be reduced,” says Lisa Gilbert, vice president of legal affairs at Public Citizen.

Nominated by former President Barack Obama, Cordray was confirmed by the Senate as the first director of the bureau, which began operating in 2011. Cordray's term was not set to expire until July 2018. Although he has not revealed his plans, Cordray is rumored to be planning a run for Ohio governor next year.

A White House spokesman tweeted that an acting CFPB director will be confirmed “at the appropriate time.” A new permanent director would require Senate confirmation.

During Cordray’s tenure, the CFPB has achieved significant victories for consumers, including returning some $12 billion to some 29 million Americans who were victims of financial-services fraud.

Last year, the agency ordered Wells Fargo to pay $185 million in refunds and fines for phony accounts opened in consumers' names. The agency also ordered full restitution to the affected consumers.

The CFPB has faced setbacks too, including a House rollback of a rule that would have limited forced arbitration by banks and made it easier for consumers to file class-action lawsuits.

Even so, “the CFPB has been a firewall for consumers against bad behavior by financial services companies,” says Lawrence Glickman, professor of American history at Cornell University and author of “Buying Power: A History of Consumer Activism in America,” adding, “they’ve done amazing work for consumers.”

Political Battles

Over the years, opponents of the bureau have attempted to limit its oversight through lawsuits and proposed Congressional legislation.

Earlier this year, House Financial Services Committee chairman Jeb Hensarling introduced legislation that would role back Dodd-Frank regulations and reshape the CFPB into a bipartisan commission, restricting its ability to issue new regulations.

“A [bipartisan] Commission will establish transparency and diversity of thought and additional insight to ensure rules are beneficial to consumers and the economy,” Richard Hunt, president of the Consumer Bankers Association, said in a statement.

Consumers Union, the policy and mobilization division of Consumer Reports, believes the bureau's authority should not be weakened and that it has done important work on behalf of consumers. 

“Consumers need a tough watchdog in Washington to protect them from abusive practices that jeopardize their financial security,” said Pamela Banks, senior policy counsel for Consumers Union. “We can’t afford to take the financial cop off the beat and leave families vulnerable to costly scams and rip-offs.”