At last, a nominee – but still no director in sight.
On July 18, just days before the CFPB officially opened for business, President Obama nominated former Ohio Attorney General Richard Cordray to lead the Bureau.
As CFPB’s assistant director – enforcement since December, Cordray was already expected to be a “big cop” at the Bureau. Given his history of going after banks over foreclosure issues, many expect him to continue to take aim at lenders of all stripes.
Cordray was one of the state attorneys general heavily involved in the investigation of foreclosure and servicer practices.
“His actions against financial companies have resulted in more than $2.5 billion of settlements,” noted American Banker in naming Cordray one of its “People to Watch 2011.” He took action against Ally Financial and GMAC Mortgage over foreclosure practices, settled a securities fraud class action suit against AIG, and accused Bank of America of concealing losses and bonuses at Merrill Lynch.
“Prior to this, as Ohio’s attorney general, Rich helped recover billions of dollars in things like pension funds on behalf of retirees, and stepped up the state’s efforts against unscrupulous lending practices. He’s also served as Ohio’s treasurer and has successfully worked with people across the ideological spectrum – Democrats and Republicans, banks and consumer advocates,” Obama said at a Rose Garden speech.
“Richard Cordray has earned a reputation as one of America’s strongest advocates for the interests of consumers,” Treasury Secretary Tim Geithner said in a statement that praised the efforts of Elizabeth Warren in standing up the agency.
He was one of Elizabeth Warren’s first major hires after she was appointed assistant to the President and special advisor to the secretary of the Treasury last fall. He had served as attorney general since 2008, when he won a special election to replace Ohio AG Marc Dann, who had left mid-term over a sexual harassment scandal, according to a Washington Post profile. He had previously lost races for the U.S. House and Senate.
When asked directly whether she was disheartened at not being able to lead the agency that was her brainchild, Warren told Washington Post columnist Michelle Singletary, “I’m not disappointed at all. We have an agency. We need to move forward.”
But she also told the New York Times’ Joe Nocera: “In a world in which the Republicans would have let me have the job, yeah, I would have been glad to have stayed. But they made it so clear that was never going to happen.”
In a post on the White House blog on July 18, Warren wrote, “There’s lots of good news, but make no mistake: this agency still has enemies in Washington, D.C. And they have a plan.”
Indeed, on July 21, Sen. Richard Shelby (R-Ala.) took a hard stance, repeating a vow by Senate Republicans to block any CFPB nominee unless changes are made to the Bureau, including replacing the individual director with a panel.
“Regrettably, President Obama has ignored these proposals for months,” Shelby wrote in his Wall Street Journal editorial. “As a result, Mr. Cordray’s nomination is dead on arrival in the Senate and will remain so until these reasonable changes are made. The law allows the administration to delay the bureau’s start date for an additional six months. I encourage President Obama to exercise this option and come to the negotiating table.”
It’s an issue that Obama did not address in his nomination speech. Rather, he made light of the situation with a reference to Cordray’s status as a five-time Jeopardy champion.
“That’s why … all his answers at his confirmation hearings will be in the form of a question. That’s a joke,” the President said.