Wall Street was apparently put on notice yesterday by President Barack Obama’s nomination of former federal prosecutor Mary Jo White to head the Security and Exchange Commission and his simultaneous bid -– once more -- to have former Ohio Atty. Gen. Richard Cordray confirmed by the Senate as head of the Consumer Financial Protection Bureau, an operation he has been running with fervor for the past year.
Observers are predicting that Republicans will fight Cordray’s appointment to a full five-year term as they did before he was appointed to the position during a Congressional recess in late 2011.
“With the appointments, the president showed a renewed resolve to hold Wall Street accountable for wrongdoing, extolling his candidates’ records as prosecutors,” write the New York Times’ Ben Protess and Benjamin Weiss.
"We passed tough reforms to protect consumers and our financial system from the kinds of abuse that nearly brought the economy to its knees….,” Obama said in making the announcements at the White House with both nominees by his side. “But it’s not enough to change the law. We also need cops on the beat to enforce the law.”
After then throwing White’s and Cordray’s name into the ring, the transcript of the proceedings will confirm, the president said, “This guy is bothering me here.” He was not referring to one of the Senate Republicans, however, who are expected to collectively oppose the appointment of Cordray to head the organization that new Sen. Elizabeth Warren (D. Mass.) formulated but was too controversial herself to put up for congressional approval.
Obama was actually “swatting at a fly.”
Sen. Mike Crapo (R-Idaho), the ranking member of the Senate Banking Committee, indicated that he and fellow Republicans will continue to fight to “[turn] the bureau into a five-member commission, subject to the congressional appropriations process,” Danielle Douglas reports in the Washington Post.
“Analysts say Cordray’s best chance of winning confirmation might involve a deal that turns the bureau into a commission with Cordray as chairman,” Douglas observes. He also writes that “those who support having a commission-led agency say that it is the best way to protect consumer interests in the long run, because the strength of enforcement could waver depending on who is at the helm [in the Senate].”
“Richard’s appointment runs out at the end of the year, and he can’t stay on the job unless the Senate finally gives him the vote that he deserves,” Obama observed in his remarks. “Financial institutions have plenty of lobbyists looking out for their interests. The American people need Richard to keep standing up for them.”
JPMorgan Chase chaiman and CEO Jamie Dimon actually “praised” Cordray’s work as the head of the agency in an interview with Fox Business News, Bloomberg’s Carter Dougherty points out. “They started from ground zero and they are making great progress,” he said, calling its qualified mortgage rule, which outlines underwriting standards, “‘good, thoughtful’ and prompt.”
White, who was attorney for the Southern (a.k.a. “Sovereign”) District of New York from 1993 to 2002, would be the first former prosecutor to head the SEC. She has been in private practice at the New York firm of Debevoise & Plimpton, “defending companies and executives accused of white-collar crime or securities law violations,” as the Los Angeles Times’ Jim Puzzanghera and Andrew Tangel write.
The diminutive but “tough as nails” prosecutor, as Obama and several others put it, has indeed “benefited from the revolving door between public service and private practice,” the Economist’s Schumpeter columnist writes, pointing to a “scathing” article by Bloomberg’s Jonathan Weil, who notes that White is “tak[ing] over an agency that is ridiculed more than feared.”
“A recurring problem at the SEC has been the overly friendly relationships between its staff and the people the agency is supposed to be policing,” Weil says. “A question for senators to ask White during her confirmation hearing is what she will do to change this culture of coziness, which she has used to her clients' advantage as a lawyer in private practice.”
But wait, there’s more….
On a lighter note, if you missed Brian Williams journey to pitchman Ron Popeil’s Beverly Hills kitchen, where he not only films his infomercials but also works on inventions like a forthcoming splash-less turkey roaster that uses olive oil and delivers a fully cooked bird in 45 minutes, do yourself a favor and take a peek at the "Rock Center" profile of “the best-known salesman of the television era; maybe the best salesman of the modern era, period.”