Hero to some, Ohio’s Cordray under fire from GOP, banks.

Some blame his agency for burdening financial instritutions with regulations.


During a House committee hearing this month, Republicans launched a torrent of attacks against former Ohio Attorney General Richard Cordray, whose job as director of a federal agency is to protect consumers in their dealings with financial institutions.

“For all the harm inflicted upon consumers,” Cordray should be fired, said one Republican.

“You have a rotting agency,” barked a second.

“Asleep at the wheel” during the Wells Fargo Bank investigation snapped a third.

Finally Rep. Michael Capuano, D-Mass., told Cordray sympathetically, “Boy, they really hate you, don’t they?”

Cordray, a former state treasurer and attorney general in Ohio who is often touted as a possible candidate for governor in 2018, has emerged as the federal official conservatives, credit unions, payday lenders, and community banks just love to hate.

As director of the Consumer Financial Protection Bureau, Cordray and his allies claim the bureau has refunded $12 billion to nearly 30 million financial consumers while levying $600 million in fines to financial institutions.

Just last year, the bureau, the U.S. Office of the Comptroller of the Currency and Los Angeles City Attorney Mike Feuer concluded an investigation showing that Wells Fargo employees opened thousands of bank accounts without customer approval, prompting Cordray’s bureau to impose $185 million in penalties and refunds to consumers.

Yet even as Democrats such as Feuer say the work of Cordray and the bureau “to protect consumers matter now more than ever,” Republicans have regularly castigated it as the worst part of the financial regulation law approved by Congress after the 2008 financial collapse on Wall Street, which was fueled in part by the spread of shaky sub-prime home mortgage loans.

Not only did last year’s Republican platform assert Cordray has “dictatorial powers unique in the American Republic,” but at this month’s hearing, House Financial Services Committee Chairman Jeb Hensarling, R-Texas, complained that “under Mr. Cordray’s leadership,” the consumer bureau “has shown an utter disregard for protecting our markets and has made credit more expensive and less available in many instances.”

Not a ‘flame thrower’

That Cordray would be the subject of such vitriol may have more to do with the office he runs than the person he is.

“This is not some flame thrower,” said Norman I. Silber, professor of consumer law at Hofstra Law School. “This is a person who has a very solid grasp of what the important problems are, and what the problems are that one can do something about.”

Unless President Donald Trump fires Cordray, he likely will remain in his post until his term expires in July of 2018. And while conservatives in Washington would love to have Cordray fired, some Ohio Republicans have urged Trump to keep him in office, fearing he would enjoy a political bump if fired by the Republican president.

“Canonizing Cordray” by firing him would make “him the odds-on favorite for getting the Democratic nomination for governor,” said Dennis Eckart, a former Democratic congressman from Cleveland. “He would be clearly defined by Trump’s own actions as the anti-Trump candidate.”

Cordray’s office did not make him available for an interview, preferring to provide written responses to questions. Those written responses shed little light on whether he plans to run for governor next year.

“I am 100 percent focused on my job to protect consumers.” he wrote in answer to the questions.

Republicans aren’t convinced. During the hearing, Hensarling sarcastically expressed surprise to see Cordray at the witness table because “there have been many press reports saying that you would have otherwise returned to Ohio to pursue a gubernatorial bid.”

Cordray and the bureau have been in the bulls-eye of conservatives and some financial institutions since the bureau was first championed by Elizabeth Warren, now a U.S. senator from Massachusetts.

With the Senate refusing to confirm Cordray’s nomination in 2011, President Barack Obama used a recess appointment to place him in the director’s post. Not until 2014 with the support of Democratic Sen. Sherrod Brown and Republican Sen. Rob Portman did the Senate confirm Cordray.

Court fight

Among the accomplishments claimed by the bureau are regulations requiring financial institutions to write terms of credit card agreements and home mortgage loans in an easy-to-understand manner.

“They took complicated financial information and simplified it,” said Ryan Schick, a former small business adviser to Columbus Mayor Andrew Ginther. Schick said small business owners told him the consumer bureau has “peeled away some of the smoke.”

But the opposition has continued with Portman himself objecting to the bureau’s structure. He and many financial institutions have argued that placing the authority to run the bureau in the hands of a single director is unconstitutional, pushing instead for a board of commissioners such as the Federal Elections Commission.

In a 2-1 vote last October, a three-judge panel of the U.S. Court of Appeals for the District of Columbia ruled that the director set-up violated the Constitution because the president could only fire the director for cause, such as neglecting his work. The full appeals court will hear the case later this year and it could well into next year before it goes before the U.S. Supreme Court.

Defenders of placing power in the hands of a single director say it leads to rapid decisions. But Aaron Stetter, executive vice president of the Independent Community Bankers of America, said, “From our perspective, it’s not about quick decisions; it’s about getting the decisions right. The five- member board would allow the opportunity to get good deliberative decisions.”

Although Stetter said he did not “have an issue” with Cordray’s “performance,” he complained about the “accumulation of the regulations that community banks have to comply with.

“That takes them from doing their primary job of serving their customers,” he said.

Community banks — some in this area include Woodforest National Bank in Dayton, WestBanco Bank in Beavercreek, and Farmers and Merchants Bank in Miamisburg — tend to be smaller than the banking giants on Wall Street.

In his quiet style, Cordray has firmly defended the consumer bureau. During his appearance before Hensarling’s committee, Cordray said “those who talk about weakening or destroying the Consumer Bureau are missing the importance of the work we are doing to stand up for individuals and families all over this country.”

“Nobody should want to return to a system that failed us and produced a financial crisis that damaged so many lives,” he said.

Marty Schladen of the Columbus Dispatch contributed to this story.



Reader Comments ...


Next Up in Politics

Silicon Valley fighting Portman’s efforts to end sex trafficking
Silicon Valley fighting Portman’s efforts to end sex trafficking

Sen. Rob Portman’s fight to keep websites from selling children and women online for sex is being met with resistance by Silicon Valley. Portman, R–Ohio, who along with a small group of senators has waged a years-long battle against Backpage, a classified site infamous for being the leading online market to purchase children for sex, is...
Trump speaks to U.N. saying some portions of world are ‘going to hell’
Trump speaks to U.N. saying some portions of world are ‘going to hell’

STORYLINE:   President Donald Trump delivered his first address to the United Nations General Assembly. In a more than 40 minute speech, the President delivered some tough talk for North Korea and Iran.  President Trump said major portions of the world are in conflict and some are "going to hell."  He said the United Nations...
Ohio Supreme Court to decide on new abortion laws
Ohio Supreme Court to decide on new abortion laws

By all accounts, abortion opponents have been racking up win after win in the Ohio Statehouse over the last six years, making it more difficult for women to terminate unwanted pregnancies. Now the Ohio Supreme Court could cement or unravel those wins, depending on how it decides two pending legal challenges. The high court heard arguments on Capital...
How Jane Fonda's 1972 trip to North Vietnam earned her the nickname ‘Hanoi Jane’
How Jane Fonda's 1972 trip to North Vietnam earned her the nickname ‘Hanoi Jane’

On a hot, sticky May afternoon in 1970, a crowd of several thousand students and protesters took over the University of Maryland mall. Many were there to protest the Vietnam War. Others were hoping to catch a glimpse of a famous Hollywood actress. Her name was Jane Fonda. As the war raged, the one-time blonde bombshell cut her naturally brown hair...
What questions do you have about Issue 2?
What questions do you have about Issue 2?

You’ve probably seen commercials from both sides of Ohio’s prescription drug ballot issue. This campaign could be the most expensive in state history with millions spent on both sides already. WHAT YOU NEED TO KNOW: Making sense of Issue 2 We’re committed to helping voters understand Issue 2 before early voting begins in October and...
More Stories