At Richard Cordray's confirmation hearing today to head the new Consumer Financial Protection Bureau, the former attorney general of Ohio held out an olive branch to Senate Republicans.
"I know from my own experience that lawsuits can be a very slow, wasteful, and needlessly acrimonious way to resolve a problem,” he said. “The supervisory tool, in particular, offers the prospect of resolving complex issues more quickly and effectively without resorting to litigation.”
But Cordray’s conciliatory message was a tough sell to Sen. Richard Shelby (R-Ala.), the ranking minority member of the committee, who focused on challenging the basic structure of the agency rather than Cordray’s qualifications to run it.
“We believe today’s hearing is quite premature,” said Shelby. “We do not believe we should consider any nomination until reforms are adopted to make the bureau more accountable to the American people.”
He continued, “The director will have unprecedented authority over the lives of American people without any real check. Every American will be affected by the director’s decisions…this blatantly violates the spirit of our democratic system of government.”
In May, Shelby and 43 other Republican senators sent a letter to President Obama vowing to block any nominee unless the bureau was restructured with a board of directors, akin to the Securities and Exchange Commission, and was funded via the appropriations process.
The CFPB was created as part of the Dodd-Frank law overhauling the financial services sector, and officially opened its doors in July. The bureau was the brainchild of Harvard Law School professor Elizabeth Warren, who spent the past year organizing it, and who recruited Cordray to serve as director of enforcement. But she was a polarizing figure who triggered fierce opposition from the banking industry, and in July, Obama nominated Cordray instead to serve as the first director.
“The purpose of this hearing should be to consider whether Mr. Cordray is qualified for the job,” said Committee Chairman Tim Johnson (D-S.D.). “Instead, a vocal minority is playing games with the process and holding Mr. Cordray’s nomination hostage....This political gamesmanship is preventing Americans from receiving the consumer protections they deserve and putting community banks and credit unions at a competitive disadvantage to nonbank financial companies."
Sen. Sherrod Brown (D-Ohio) agreed. “Nobody questions [Cordray’s] qualifications,” he said. “They only want to block his nomination – or anyone else’s – because they don’t like the agency.”
Sen. Charles Schumer (D-N.Y.) accused Republicans of trying to re-open the debate on Dodd-Frank. “We fought those battles last year, and consumers won,” he said. “They lost the legislative battle....We should not re-litigate the existence of the CFPB.”
Sen. Bob Corker (R-Tenn.) said he was “shocked” and “disappointed by the rancor of this meeting.” He continued, “It would all go away if the administration would sit down and put appropriate checks and balances in place.”
As for Cordray, he remained unflappable throughout the hearing, his smiling 12-year old twins seated behind him along with his wife, Peggy, a professor at Capital University Law School in Columbus, Ohio.
He touted his experience as Ohio attorney general (he was defeated by Mike DeWine in 2010), and pointed to the CFPB’s work on simplified mortgage disclosure forms as a model action, providing clarity to consumers as well as reducing paperwork burdens for lenders. “We are looking to find the same sweet spot in the thicket of other regulations we inherited from other agencies,” he said.