07.18.11 10:33 AM ET
Obama’s New Consumer Cop
There’s one main reason Richard Cordray, President Obama’s nominee to head the Consumer Financial Protection Bureau, may actually win confirmation by the Senate: few in Washington actually know who he is.
Elizabeth Warren, the former Harvard professor, was the longtime favorite to be its first director. But with Warren unable to inoculate animosity from Senate Republicans, Obama went instead for Cordray, who has a lower profile in Washington but a background of being no less relentless than Warren when going after predatory consumer practices on products from mortgages to credit cards.
Soft-spoken and with the reputation of being more of an aloof college professor than a bank-slaying regulator, the 52-year-old Cordray has a penchant for the grandiose and goofy. Visitors to his office have noted him quoting Shakespeare and walking around the office without shoes.
But he also has a solid résumé for the job. He went to law school at the University of Chicago, spending time in Obama’s hometown. He clerked for Supreme Court Justices Byron White and Anthony Kennedy and argued seven cases before the nation’s top court, including high-profile cases about media ride-alongs with police and the language in financial statements. He even had an impressive five-day run on Jeopardy! back in the ‘80s that padded his pockets with $45,000.
His main rise on the national scene was tethered to his tenure as attorney general of Ohio, a post he landed in 2009 after the previous AG was driven from office by a sex scandal. In the wake of the recession, Cordray found visibility for going after bank powerhouses, including Bank of America, that he accused of being asleep at the wheel on lending and foreclosures. The path made him, in many ways, part of a rising breed of barnstorming state prosecutors, including Eliot Spitzer in New York and Martha Coakley in Massachusetts, who both attached their rising stars to public evils like credit-card predation or pension fraud.
From there he had bigger ambitions. Presuming he’d get a second term as AG, Cordray had mused publicly about running for governor of Ohio in 2014. But those plans were derailed when he lost his reelection effort in the 2010 Republican tidal wave. Elizabeth Warren then lured Cordray away from Ohio when she offered him a top job as director of enforcement for the blooming agency.
Warren took an instant liking to him mostly because he understood what she wanted to do with the place—and who she wanted to pursue.
“There’s a belief here that Wall Street is a fixed casino and it’s back in business, and we’re left holding the bag,” Cordray said shortly after his appointment to one of the top jobs in Warren’s inner circle. “It’s important for us to show we’ll go after a company that does wrong.” He told reporters at the time that while overzealous consumers had played a role in the financial collapse, top banks peddled offers and products to consumers that weren’t sustainable and were destined to crash at some point anyway.
One of the CFPB’s toughest problems has been addressing Republican concerns that one agency—and specifically one person, whoever leads it—has too much unchecked power over an industry that has huge influence on the health of the economy. Some Republicans haven’t opposed Warren as much as simply opposing any director at all. Instead, some like Spencer Bachus, who heads the House Financial Services Committee, have demanded that the bureau have a board of directors like the Federal Reserve System, or a panel of commissioners like the Federal Trade Commission.
Cordray has resisted those calls. Any new agency, he has said, needs to be able to be nimble and can’t make every decision by committee. In several interviews from his Washington office overlooking L Street, he has foreshadowed how he’ll lead the bureau—often providing few specifics, yet always tapping into the populist sentiment against banks that was part of Obama’s 2008 campaign and led the new president to make room for an agency devoted to consumer protection.
“We know that we have a job to do that’s important to the American people,” Cordray told the Ohio paper The Columbus Dispatch last month. He said the bureau will “start in a deliberate and transparent manner. We’re not going to come off doing random or crazy things. We will be communicating with the public and with industry, and we will be sensible about what we do.”
The White House has already begun hawking Cordray’s credentials, even before Obama formally announces the nomination in a Rose Garden ceremony on Monday. He’s received accolades from the Small Business Administration and the housing nonprofit Neighbor Works, administration officials have said. Not to mention a 2005 title of “County Leader of the Year” in American City & County Magazine.
Colleagues back in Ohio say that, despite having moved to Washington, Cordray still wants to be governor one day—a post he’s eyed since childhood. But leading Obama’s CFPB may be a higher calling, especially as its first director, and on the heels of a fierce election season likely to make him and his agency the subject of heated campaign arguments.
That, of course, is if he gets confirmed—still far from a guarantee. Obama could usher him in on a recess appointment next month, which would keep Cordray employed until the end of Obama’s term. But Republicans have threatened a procedural gimmick that would make a recess pick impossible, and the White House has instead aimed for Senate confirmation, which would come with a five-year job guarantee.
Cordray has had his share of political fights, having lost more than he’s won. But with each one, including two unsuccessful runs for U.S. House and Senate seats in the ‘90s, he’s shown resilience in being battered and a seemingly strange willingness to come back for more.
“I really got my head pounded in over the years in politics,” Cordray told The New York Times last fall. “My wife thought I was nuts.”
Sam Register contributed to this article.