WASHINGTON, D.C. –The Senate Banking Committee held a hearing today on the nomination of Richard Cordray to serve as Director of the Consumer Financial Protection Bureau (CFPB). U.S. Sen. Sherrod Brown (D-OH), who chairs the Committee’s panel on Financial Institutions and Consumer Protection, introduced his fellow Ohioan at the hearing and called for an end to partisan obstruction to the CFPB.
Following passage of the Wall Street Reform and Consumer Protection Act, Brown joined 11 senators in urging President Obama to nominate someone with a proven history of standing up to unfair and abusive practices in the financial industry, particularly in the area of consumer protection. The CFPB is aimed at helping to prevent another meltdown by cracking down on financial tricks and traps designed to deceive consumers.
Cordray was nominated by President Obama to head the CFPB on July 18, with his nomination receiving widespread support from Democrats, Republicans, business leaders and consumer advocates. Despite the breadth of support for his nomination, 44 Republican senators pledged to block his nomination unless changes are made that would weaken the potential of the Bureau to exercise effective oversight over financial institutions. Just last month, new reports surfaced indicating that banks and mortgage processors have continued forging signatures and submitting false affidavits related to foreclosure proceedings.
Cordray currently serves as Chief of Enforcement at the Consumer Financial Protection Bureau. Cordray served as Attorney General of Ohio from January 2009 to January 2011. As Attorney General, Cordray recovered more than $2 billion for Ohio’s retirees, investors and business owners and took major steps to help protect its consumers from fraudulent foreclosures and financial predators. Prior to his tenure as Ohio’s Attorney General, Cordray spent two years as Ohio’s State Treasurer and four as the Treasurer of Franklin County, Ohio. In 2008, he received a Financial Services Champion award from the U.S. Small Business Administration and a Government Service Award from NeighborWorks America. In 2005, he was named “County Leader of the Year” by American City & County Magazine.
Earlier in his career, Cordray was an adjunct professor at the Ohio State University College of Law (1989-2002), served as a State Representative for the 33rd Ohio House District (1991-1993), was the first Solicitor General in Ohio’s history (1993-1994), and was a sole practitioner and of counsel to Kirkland & Ellis (1995-2007). Cordray has argued seven cases before the United States Supreme Court, including by special appointment of both the Clinton and Bush Justice Departments. Cordray is a graduate of Michigan State University, Oxford University, and the University of Chicago Law School. He was Editor-in-Chief of the University of Chicago Law Review and later clerked for U.S. Supreme Court Justices Byron White and Anthony Kennedy.
Below is the full text of Brown’s introduction and testimony as prepared for delivery.
I’m honored to introduce one of the finest public servants I know. Rich’s mother was a social worker. His father, who has been legally blind since birth, worked with the developmentally disabled for 43 years.
It’s clear where he learned the importance of public service. As Ohio’s Attorney General, he was a strong voice for Ohioans who struggled to stay in their homes, and consumers who faced unfair practices by deceptive lenders.
He targeted financial institutions – including Fannie Mae – that used accounting fraud to undermine investments by pension funds that provide retirement security for teachers, secretaries, and janitors. Rich took on the unscrupulous actors, and in doing so he worked closely with Ohio banks to craft effective, targeted legislation to prevent banks from engaging in predatory lending.
As a treasurer at the county and state level, he promoted financial literacy efforts in schools and with seniors. As he has been throughout his career – as Solicitor of Ohio, law professor, and as an attorney in private practice – Rich will be a strong voice for consumers.
Simply put, Richard Cordray is the right person for the job. And it’s not just me saying so.
Top executives of Ohio’s Fortune 500 companies – Proctor and Gamble, Limited Brands, Forest City, and American Electric Power – strongly endorse his nomination.
Two fine representatives of Ohio’s financial institutions – Mike Van Buskirk of the Ohio Bankers League and John Kozlowski of the Ohio Credit Union League – are here today in support of Rich’s confirmation.
Steve Rasmussen, the CEO of Nationwide Insurance – a Fortune 500 company and a national leader in insurance, banking, and mortgage products – believes Rich will embrace the partnerships he’s built with the business community as leader of the CFPB.
Rich has the bipartisan support of former Ohio Attorneys General – and the current one, former Republican U.S. Senator Mike DeWine. That he would win the praise of his former opponent speaks to his integrity and professionalism.
Rich Cordray has garnered the trust of everyone from business leaders to consumer advocacy groups to law enforcement. Ohio’s leading newspapers – as well as national ones – have testified to his, fair-mindedness, and temperament to put the public good ahead of any political agenda.
I am honored to offer my strong support for his confirmation.
Richard Cordray has been educated at some of the world’s finest universities – but he will also bring a Midwestern perspective to a financial industry that is too often dominated by the coasts.
He has practiced law at the highest levels – Supreme Court clerk and advocate, Ohio Solicitor and Ohio Treasurer and Attorney General. And he’s been a five-time Jeopardy Champion.
He is a devoted public servant and a practical problem solver, who believes law abiding consumers and businesses deserve a fair chance to compete on a level playing field. I encourage a swift confirmation of Richard Cordray, of the great state of Ohio, as Director of the Consumer Financial Protection Bureau.
Congratulations on your nomination, Rich. You will undoubtedly serve our country with honor.
I would like to remind my colleagues that just three years ago, our economy was on the brink of collapse. Millions of Americans lost their jobs, their homes, and much of their retirement security. Hundreds of banks have failed, and thousands of businesses have been shuttered.
This committee – and Congress as a whole – was forced to take extraordinary actions. This was a man-made catastrophe that could have been avoided if we had a better regulatory system. But the network of agencies tasked with protecting consumers was full of holes.
Ohio, for example, was far too slow to enact meaningful consumer protections. Local efforts to try to curb ripoff loans were blocked by federal regulators. And efforts to convince federal regulators to act were ignored until far too late.
Yet just three years after that near depression, profits of financial firms now make up the same percentage of all corporate profits as they did before the financial crisis.
The banks that were too big to fail have become even bigger. After decades of coddling Wall Street, Main Street still needs our help: Americans are struggling to find jobs, their homes are still under water, and their pensions are still being drained.
To protect against future wealth-destroying crises, Congress created – with bipartisan approval – the Consumer Financial Protection Bureau (CFPB) to help ensure that consumer protection is a priority rather than an afterthought.
It is an independent entity – with a single director.Its mission is to bring oversight and transparency to checking accounts, credit cards, mortgages, and student loans.
It is empowered with tools to ensure that our financial system supports job creation – by ending the tricks and traps, families and small businesses will keep more of their hard-earned money, building middle class wealth and helping businesses thrive.
The Bureau is subject to stringent notice, consultation, and analysis requirements under the Dodd-Frank Act, the Administrative Procedure Act, the Small Business Regulatory Enforcement Fairness Act, and the Regulatory Flexibility Act.
Through the Financial Stability Oversight Council, the other banking regulators have unprecedented authority to overturn the CFPB’s rules. Already, the CFPB is ensuring that mortgage contracts are written in ways that consumer can more easily understand.
It has earned positive reviews from industry and consumer groups alike for the substance and process involved in creating a new model mortgage loan disclosure form. It’s also helping our men and women in uniform – preventing them from being targeted by bad actors who profit from financial practices that defraud and deceive those serving the cause of freedom.
Today’s hearing comes at a critical time for our economy.
In two days, the President will speak directly to the American people in a joint session of Congress.
He will outline the steps we must take to create jobs and strengthen our economy. The issue that we are considering today is critical to that effort – whether or not this Committee and the Senate confirms a highly qualified, distinguished and pragmatic public servant to lead a vital new federal agency.
The CFPB will play a vital role in helping rebuild our economy. The American people are fed up with the partisanship in Washington, yet some of my colleagues seem bent on discovering new ways to increase that partisanship.
Never in our nation’s history, has the minority pledged to block a nominee because it opposed an agency’s very existence. We have already had this debate once.
Last year, amendments were offered that would have watered down this agency’s authority – they were considered and rejected by Senators from both political parties.
Now is not the time to undermine an agency that a bipartisan majority in Congress created. It is not the time to play a dangerous game with the financial security of millions of families and businesses.
And, as my colleagues know, the result of their actions is to tilt the playing field so that traditional banks are regulated while non-bank lenders, which bear the lion’s share of responsibility for the recession, are left untouched.
The minority’s own witness told the Subcommittee on Financial Institutions and Consumer Protection as much on August 3rd.
It’s time we focus on moving forward – armed with the tools that can create jobs and strengthen our economy. I hope my colleagues on the other side of the aisle will set aside partisan ideology and focus on the needs of middle class Americans.
Richard Cordray’s distinguished career – Supreme Court clerk, attorney, Ohio Solicitor General, Ohio Treasurer, and Ohio Attorney General – has shown he is the right person for the job at the right time for our country.
It is time to put this consumer cop on the beat.