|Cordray Says He Has "Full Authorities" As Consumer Chief|
CINCINNATI (TDB) --Former Ohio Attorney General Richard Cordray, who is President Obama's pick to run the new Consumer Financial Protection Bureau, today brushed off GOP critics who contend his appointment is an illegal expansion of presidential powers. During a a wide-ranging Q-and-A session at the Brookings Institution, Cordray said unregulated financial firms such as payday lenders "led a race to the bottom that pushed aside responsible businesses including community banks and credit unions, and greatly harmed consumers." The Daily Bellwether has the complete 35-page text of Cordray's session available by clicking here.
Cordray, a Democrat, served as the county treasurer in Columbus, then state treasurer, then attorney general until 2010 when he lost to Mike DeWine. He said federal supervision of student lenders, mortgage originators and payday lenders is moving with full authority. He said financial markets need to become more fair, transparent and competitive.
The Senate has not confirmed Cordray. Although it has not been holding formal sessions, the Senate is not technically in recess. The White House said Wednesday the Senate was stalling the and called the refusal to recess a "gimmick." Obama made a "recess appointmen," announced his decision in Cleveland yesterday, and set the stage for a Constitutional clash over executive powers. Here's an excerpt of Cordray refusing to flinch about his right to hold the job:
"MR. CORDRAY: Okay. As I said, the appointment is valid.The Dayton Daily News reported Cordray warned financial institutions there will be consequences for violating the law. He showed some teeth. But it appears to be an open question about whether his appointment stands and if he can back up his bark with a bite. Ohio Daily Blog notes that Cordray's agency will even fight for members of the Tea Party, among the agency's harshest critics, who have been cheated during the financial crisis.
I’m now the director of the bureau. The important thing for us, without me
trying to delve into details of that, is that we now have the ability to protect
consumers across this country on both bank and non-bank issues and we
are going to be 100 percent focused, I personally, on doing so.
"In the run up to the financial crisis, many unsupervised
firms led a race to the bottom that pushed aside responsible businesses,
including community banks and credit unions, and greatly harmed
Now, for the first time, we can exercise the full authorities
granted to us under the new law. That is the specific difference that
having a director makes. Today we are launching the bureau’s program
for supervising non-banks. We will begin dealing face-to-face with payday
lenders, mortgage servicers, mortgage originators, private student
lenders, and other firms that often compete with banks, but have largely
escaped any meaningful federal oversight.
These are important markets. Many provide valuable
services to customers who lack access to other forms of credit. And they
are big markets. Nearly 20 million American households use payday
lenders, and they pay roughly $7.4 billion in fees every year.
Many subprime loans during the housing bubble were made
by non-bank mortgage brokers. Since most of these businesses are not
used to any federal oversight, our new supervision program may be a
challenge for them. But we must establish clear standards of conduct so
that all financial providers play by the rules.
With our full authorities in hand, we now have a variety of
tools to address the problems facing consumers. We will succeed in our efforts."