Millions of people have lost their homes to foreclosure, largely due to lenders pushing borrowers into unsustainable loans that they couldn’t afford. This pushed our country into the Great Recession and has left countless families struggling to make ends meet.
Congress created the Consumer Financial Protection Bureau as part of the Dodd-Frank Reform Act to stem the explosion of bad loans that fueled the housing bubble and then, when it burst, helped tip our nation into recession and near financial ruin. President Obama has re-nominated its current director, Richard Cordray, to continue to lead the bureau.
During his first year at the helm of the bureau, Cordray has shown himself to be a consumer advocate who has recognized the concerns of the market and lenders when drafting mortgage, credit card, payday loan and other rules and regulations designed to protect consumers from being exploited. He has served the bureau well in an open, thoughtful and responsible manner.
Cordray will appear before the U.S. Senate for a confirmation hearing today with a vote shortly afterward. So far, 43 Republican senators have vowed in a letter sent to President Obama to block Mr. Cordray’s path to confirmation. Sen. Rob Portman, R-Ohio, did not sign the letter and may be open to supporting a Cordray nomination, but only at the expense of consumer protections.
Make no mistake — Portman and his GOP colleagues have no beef with Cordray himself and have said as much; instead, they are trying to weaken or eliminate the one agency devoted to protecting American consumers in the financial market. At the core of the opposition to the bureau is the desire to dilute its funding, rulemaking ability and enforcement by subjecting it to partisan gridlock. A plan to allow Congress to control the agency’s purse strings, instead of continuing to fund it through the Federal Reserve, will compromise the bureau’s independence to help consumers. The end result would be a financial marketplace that operates without regard for the financial welfare of millions of families.
Ohioans need the Consumer Financial Protection Bureau and Director Cordray. Ohio is among the top 10 states with the highest foreclosure rates. In January, one in every 612 houses in Ohio received a foreclosure notice, according to RealtyTrac. Across the country, African-American and Latino homeowners are twice as likely to face foreclosure as white homeowners. These higher rates reflect the fact that borrowers of color are also consistently more likely to receive high risk loans even after accounting for income and credit status.
We need a strong CFPB free from political pressures to curb these kinds of practices before families are thrown out of their homes.
The financial industry benefits when the rules of the marketplace are clear and accountability for noncompliance is ensured. Banks and other financial entities should be held to appropriate standards while the bad actors that prey on unsuspecting consumers must be properly and swiftly sanctioned for their behavior. That’s why Congress created the Consumer Financial Protection Bureau in the first place.
Cordray deserves an up-or-down vote before the United States Senate. Sen. Sherrod Brown, D-Ohio, has indicated his support for Cordray and now it’s time for Sen. Portman to stand with Ohio families and confirm Cordray as well.