(Cross-posted at Winning Progressive)
President Obama started 2012 off well yesterday when he made a recess appointment of Richard Cordray to head the Consumer Financial Protection Bureau (“CFPB”). And, despite ridiculous Republican threats to challenge the appointment, Mr. Cordray has immediately gotten to work. Today, the CFPB announced the launch of its non-bank supervision program, through which it will carefully scrutinize the actions of mortgage companies, payday lenders, and private education lenders to ensure that they are complying with consumer protection laws. A second phase of the non-bank supervision program is in the works, and will cover debt collectors, auto financing, consumer reporting, and money services businesses. And Mr. Cordray has vowed not to let Republican squawking slow him down, and has outlined steps the CFPB is taking to crack down on illegal financial activity.
The CFPB and the appointment of Richard Cordray is a real progressive victory delivered by the Obama Administration. Created by one of the core provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act that the Democratic Congress passed in 2010, the CFPB is providing the American people with a long-needed federal regulatory watchdog over some of the sleaziest business sectors, including payday lenders, credit card companies, credit counseling entities, and subprime mortgage lenders. For far too long, vast portions of the American middle class are being squeezed by unfettered financial service companies that have used all sorts of unscrupulous tactics to maximize profits. The CFPB is charged with changing this dynamic by enforcing a wide array of consumer protections, including the credit card industry reforms signed by President Obama, and consolidating enforcement of consumer protections that are currently handled by seven different agencies. The CFPB’s goal is to make the pricing and risks of financial products offered by these entities much clearer and fairer to the American public so that payday lenders, etc. are no longer able to prey on the most financially vulnerable among us.
And Mr. Cordray is a great choice for leading the CFPB, as he has a proven track record of fighting for working families. For example, in his time as Ohio Attorney General, Cordray was at the forefront of efforts to hold Wall Street accountable for the economic debacle that they created. Faced with widespread foreclosures, declines in pensions, and increases in unemployment due to the casino-like atmosphere that overtook Wall Street, Cordray sought to recover funds from the Wall Street banksters whose fraudulent practices created those problems. And Cordray was successful, as the New York Times explains:
Mr. Cordray in two years in office has demonstrated a willingness to sue early and often, filing lawsuits against global financial houses, rating agencies, subprime lenders and foreclosure scammers. He has wrested about $2 billion so far, a string of gilded pelts: a $475 million Merrill Lynch settlement, $400 million from Marsh & McLennan and $725 million from the American International Group.
. . . .
His office has returned money to investors, pension funds, schools and cities. And he has directed millions to agencies fighting foreclosure.
Yesterday, President Obama and Mr. Cordray met with one of the families in Ohio that were helped by Cordray’s work – William and Enida Eason. As President Obama explained at his speech yesterday announcing Mr. Cordray’s appointment:
If you’re a senior, Richard is going to help make sure you don’t lose your home or your retirement because somebody saw you as an easier target. And that’s what happened to the Easons. Endia, who I think is here — Ms. Eason, are you here? You’re somewhere here. There’s — Ms. Eason is down there. Ninety-one years old. And as I mentioned, Ms. Eason’s husband, William, is a former Marine — also a former boxer. So don’t mess with him.
And I just want to repeat, 10 years ago they were approached by a broker who offered them a loan to make needed repairs on their home; made everything sound easy. The Easons agreed. Broker ended up disappearing. They get left with $80,000 in debt, almost lose their home. They didn’t lose it because of the intervention of some terrific non-for-profits that Richard, when he was treasurer here in Ohio, helped to support.
Now, the Easons are good people. They’re what America is all about. They worked hard. They served their country. They saved their money. They didn’t live high on the hog. It’s a modest house. They earned the right to retire with dignity and with respect, and they shouldn’t have to worry about being tricked by somebody who’s out to make a quick buck. And they need somebody who is going to stand up for them, and millions of Americans need somebody who is going to look out for their interests. And that person is Richard Cordray.
The recess appointment of Mr. Cordray was also encouraging for progressives because it is a great example of President Obama taking the fight to the GOP. For the past year and a half, the GOP has managed to prevent the CFPB from doing its job by filibustering Obama’s nominees (first Elizabeth Warren and then Richard Cordray). Yesterday’s recess appointment makes clear that enough is enough, and taunts the GOP to choose a high profile battle over recess appointments over an agency that has strong public support and on an issue of economic justice that the GOP is plainly on the wrong side of. And, by waiting to make the appointment until yesterday, when the second session of the 112th Congress officially began, President Obama ensured that Cordray’s appointment would last until the end of 2013, rather than until the end of this year.
Finally, some progressives were disappointed last summer when President Obama decided to withdraw his nomination of Elizabeth Warren for the CFPB director post and to instead nominate Mr. Cordray. But, as we noted at the time, this decision has given us progressives a two-fer – a great director of the CFPB and a great Senate candidate in Massachusetts to replace Republican Scott Brown.
We progressives should help support these great developments by:
- writing a letter to your local newspaper editor explaining why you support the CFPB and Mr. Cordray
- supporting Ms. Warren’s Senate campaign, so that the CFPB and consumers will have a strong voice in the Senate starting in 2013.