Can Richard Cordray Win Over Consumer Financial Protection Bureau Foes?
Richard Cordray remembers visiting Washington as a kid, and one of the really hot destinations was always the FBI building. “They had all this cool stuff,” he says, citing the weaponry on display along with the photos that told the story of Prohibition-era bank robber John Dillinger and the G-men who launched a new and more glamorous era of crimefighting. “The FBI was just a government bureau,” says Cordray, “but there was a real need in the country at that point in the 1920s and ’30s, lots of violence especially in the Midwest, where I come from, and they met the need, and they solved the problem, and people loved them for that.”
As the first director of the newly created Consumer Financial Protection Bureau, Cordray sees the same kind of opportunity to fix a problem and win over the public as J. Edgar Hoover did all those decades ago. He envisions the agency’s future home, the aptly named Thrift Supervision building at 17th and G streets, right across from the White House and close to the Mall, as a welcoming place with exhibits about consumer issues, maybe even edgy stuff like white-collar crime, and restrooms open to the public, so it can “dawn on them that there is a place where they can get some help.”
Cordray talks about “the work” he’s doing in almost reverential tones. In his first month on the job, he put in place consumer protections for people sending remittances to other countries. Next will be clearer and simpler guidelines on mortgages, “Know before you owe,” along with credit cards and student loans.
Given the financial misdeeds of the last few years, Cordray thinks this is good government at work, but Republicans remain opposed to the consumer agency as currently structured and to what they believe is President Obama’s unconstitutional use of his recess power in naming Cordray. Mississippi Sen. Roger Wicker called on his fellow Republicans to boycott Cordray’s first appearance before the Senate banking committee, but half the committee’s Republicans showed up anyway, and the boycott fizzled.
If anyone can lower the temperature on Capitol Hill, it could be Cordray. Tall, lanky, and soft-spoken, he could be cast in an updated version of Mr. Smith Goes to Washington. He refuses to be drawn into attacks on critics of the new consumer agency, saying he takes their concerns at face value and is confident that once they size him up and see what his agency is doing, they’ll be won over, or at least neutralized.
“I don’t think it’s going to be that hard,” he said. “Because they do understand. They hear constantly from people with real problems in their communities … They have friends who struggle financially or had a problem, made a bad decision, or ran into a fraud or a scam. It’s not foreign to people, we just have to help them see it in light of its human impact.”
Of course, that’s what Elizabeth Warren thought too, that if she made her case to enough people, that she could win them over. And she did persuade some lawmakers, but not enough to win Senate confirmation to head the agency that was her brainchild. She recruited Cordray, a five-time Jeopardy! winner and former Ohio attorney general, whip smart but a low-key and calming presence, the opposite of the high-voltage Warren.
Cordray will have lots of opportunities to test his thesis with multiple invitations this month to testify on Capitol Hill. His first appearance as director before the House Oversight Subcommittee on TARP, Financial Services, and Bailouts of Public and Private Programs was a surprisingly cordial, even friendly, exchange and a striking improvement over how the committee dealt with Warren when she was charged with getting the agency up and running. Republican Patrick McHenry, who chairs the subcommittee, once broke congressional protocol to call Warren “a liar.”
Republicans assure Cordray that their opposition is not personal, that they have genuine concerns about the potentially unbridled power of an agency that can write rules in the mortgage market, enforce those rules, and send teams into financial institutions to look at any documents they want and ask questions. The agency will issue exam reports that will lead to a rating for how these institutions treat their customers. “And that’s a very powerful tool, and a very effective tool,” says Cordray. “It doesn’t involve lawsuits or litigation, but it can clean up a lot of problems.” Just as the FBI made its reputation fighting the enemies of an earlier era, Cordray thinks his agency’s time has come. But unlike Hoover, who served for decades under multiple presidents, Cordray has just two years before his recess appointment expires.