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Richard Cordray and Consumer Protection

The failure of the U.S. Senate to confirm Ohio’s Richard Cordray to head the Consumer Financial Protection Bureau (CFPB) on December 8, 2011 is the first time in Senate history that a qualified candidate has been blocked by a party that disagrees with the existence of an agency created through a bipartisan vote. This dubious distinction was first expressed by Ohio’s U.S. Senator Sherrod Brown and confirmed by the Senate historian. The Cleveland Plain Dealer PolitiFact Ohio and its panel of editors have also investigated the truthfulness of the statement and both confirm it.

Cordray is the former attorney general of Ohio who came to national attention for his aggressive investigations of mortgage foreclosure practices.  Among many other professional accomplishments, Cordray is also a five-time Jeopardy champion.

John Cushman, Jr. of the New York Times, describes the near-term function of the CFPB: “The agency can accomplish part of its mission, the protection of consumers from unscrupulous lending practices, without having a director in place. But some of its new powers are vested by law in the director, so it could not expand into realms like the regulation payday lenders and other nonbank financial businesses.”

Senate Banking Committee Chairman Tim Johnson made the following statement on the vote outcome: “American families paid a steep price for the financial crisis, battered by layoffs and foreclosures, Congress created the CFPB to protect consumers and clean up the marketplace, but it needs a director.  Richard Cordray has proven himself capable for the job, and there is no legitimate reason to block his confirmation.”