As Ohio Attorney General, Richard Cordray took on big banks, credit rating companies and mortgage servicers, but his biggest challenge may be yet to come: Can he win enough Senate votes to be confirmed as director of the new Consumer Financial Protection Bureau?
As Ohio's top policemanl from 2008 to 2010, Cordray filed lawsuits against credit rating companies Moody's and Standard and Poor's for giving AAA ratings to junk debt, and sued big financial institutions such as Bank of America Corp. for alleged foreclosure fraud. He also targeted financial practices that led to massive losses in the state’s public pension and retirement funds.
Those credentials may not do much to help the would-be CFPB director in facing stiff opposition from congressional Republicans who seek to transform the bureau’s fundamental structure, and from businesses that fear he will overstep his regulatory bounds.
Richard Shelby , the top Republican on the Senate Banking Committee, called the nomination “dead on arrival,” and even Democrats have been less than warm in their reception.
Senate confirmation of Cordray requires at least 60 votes. In May, 44 Senate Republicans signed a letter pledging to block confirmation of anyone the White House nominates until the structure of the agency is changed to weaken the director’s power. The Senate Banking Committee has not yet scheduled a confirmation hearing for Cordray, the first step in moving his nomination forward.
The pro-business U.S. Chamber of Commerce expressed concern about how Cordray might use the bureau’s powers if confirmed as director. The Chamber launched a special website, CFPBspotlight.com, last summer to track the new agency which it describes as the “most powerful federal financial regulator .”
"We have seen efforts to regulate the mortgage industry through enforcement settlements rather than by engaging in a deliberative, fair, transparent rulemaking,” said David Hirschmann, president and CEO of the Chamber’s Center for Capital Markets Competitiveness. He added that the CFPB’s scope of authority is still not well defined and that he fears the bureau’s threat to consumer choice and access to credit for small businesses.
“We will need to understand where Mr. Cordray stands on these issues,” Hirschmann said.
It’s no surprise that business and Republicans have reacted in that manner, but it may be just as easy to explain why some Democrats are unenthusiastic. “The reason is simple: He is not Elizabeth Warren,” says The New Republic. The magazine endorsed Cordray and urged critics to examine his public record to remove their doubts.
Warren, the Harvard law professor who proposed creating the CFPB, points to Cordray’s track record and says he would be a “stellar director” for the brand-new agency.
Cordray “saved $2 billion for retirees, investors, and business owners as Ohio Attorney General and … has worked hard on the front lines fighting against fraudulent foreclosures and abusive lending practices,” Warren wrote in a Huffington Post commentary.
Other consumer advocates agree.
“He’s got a gold-plated resume and a wealth of experience…He’s very reasonable, he’s very smart, he’s very fair, Illinois Attorney General Lisa Madigan told the Washington Post earlier this year. “He understands the financial, the economic, the fiscal things, as well as the law enforcement side of it… To me, that’s the type of person you want in that position.”
Richard Cordray trivia:
- Father was a program director for a treatment center for the mentally disabled
- Mother was a social worker who founded the first foster grandparent program in Ohio
- High school varsity basketball player, valedictorian
- Graduate of University of Chicago Law School in 1986
- Five-time champion and winner of $45,303 on the game show Jeopardy in 1987