Commentary

Cordray Gets Nod To Run CFPB; Faces Fight

Richard Cordray, 52, who aggressively investigated mortgage foreclosure practices before losing reelection as attorney general of Ohio and now works under Elizabeth Warren as director of enforcement at the new Consumer Financial Protection Bureau, has been nominated by President Barack Obama to lead the agency. The CFPB formally opens its doors this week.

Warren, who proved too controversial and outspoken for D.C. before she even arrived there (apparently both without and within the administration), has been conducting open houses for both the media and banking big shots since she accepted the assignment to build its framework last September as an assistant to the president and a special advisor to Treasury Secretary Timothy F. Geithner. (That job did not require Senate approval, as the Los Angeles Times reported, and it has been a foregone conclusion that she would not receive it.)

(I've been squirreling away URLs of stories about Warren for months in the off-chance that she might snare the nomination after all Here's a more-intimate-than-most profile from Vogue; here she is in some tightly edited video clips from the New York Times. One of her more colorful quotes came on an appearance on "Real Time with Bill Maher" last January: "The idea behind this [agency] is to ... try to end the days of 'word barf,' you know, on the page.")

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So who, exactly, is this Cordray fellow? After losing bids for Ohio attorney general and the U.S. Senate on the Democratic line, Cordray was elected state treasurer in 2006, according to WHIO-TV.com's Jim Otte. He also worked as state solicitor under former AG Lee Fisher and won a special election in 2008. He narrowly lost his race for re-election last year (his opponent charged he was "anti-business"), however, and was quickly "lured" to the CPFB, as Deborah Solomon and Maya Jackson Randall put it in the Wall Street Journal.

Warren was effusive about the "stellar" appointment yesterday, saying in a statement: "Rich has always had my strong support because he is tough and he is smart -- and that's exactly the combination this new agency needs." Warren is expected to return to teaching at Harvard; rumors are that she herself may run for the Senate in the fall.

The formal nomination will be made by the president today but, in a written statement over the weekend, he said that Cordray: "has spent his career advocating for middle-class families, from his tenure as Ohio's attorney general to his most recent role as heading up the enforcement division at the CFPB and looking out for ordinary people in our financial system."

Well, that's not exactly the type of endorsement that will endear him to the bankers he'll be regulating, if his appointment goes through, Binyamin Appelbaum reports in the New York Times.

"... Wall Street executives also bristled at the selection of Mr. Cordray to lead the bureau's enforcement team," he writes. "Seen as a zealous prosecutor of financial crime, Mr. Cordray is a similarly contentious figure among bankers and lobbyists."

Indeed, 44 Republican senators are refusing to vote on any nominee, demanding a board of directors run the agency rather than single person.

"Until President Obama addresses our concerns by supporting a few reasonable structural changes, we will not confirm anyone to lead it," Sen. Richard Shelby (R - Ala.) said in a written statement.

Whether or not there's a name on the door for the top office, the agency will have the power, come Thursday, to "send its examiners into Goldman Sachs, JPMorgan Chase and other financial titans," Ben Protess writes in a Dealbook piece for the Times. "They have almost unlimited ability to go after the banks on consumer issues," MF Global policy analyst Jaret Seiberg tells him. "They're saying, 'We're the new sheriff in town." But, he continues, its influence will be "muted" until a chief is in place.

Confirmation before the Senate's scheduled summer recess is unlikely, Ylan Q. Mui and Zachary A. Goldfarb report in the Washington Post. They also fill in some additional background on the nominee, including the fact that he is "a soft-spoken former 'Jeopardy!' champ." He attended the University of Chicago Law School, where he was editor-in-chief of its law review, and clerked for moderate Supreme Court Justices Byron R. White and Anthony M. Kennedy. "But," they write, "Cordray worked for more than a decade at the Kirkland & Ellis law firm, a significant Democratic donor."

Rep. Barney Frank (D-Mass.), a sponsor of the law that created the agency, said Warren was the victim of "wholly unjustified political attacks" but called on Republicans to confirm Cordray, who he indicated was his second choice for the job.

Karen Blumenthal tell us in a Wall Street Journal piece reviewing what the agency will do that it expects to have about 500 employees at launch and will expand to about 1,225 employees in the fiscal year beginning Oct. 1, when it will have a budget of $329 million.

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