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Cordray is Confirmed CFPB Chief

Cordray CFPB Chief

It’s been a long few years, but after politicians did their song and dance, complete with holding a confirmation hostage and no shortage of bickering, Richard Cordray is confirmed as the Consumer Financial Protection Bureau chief.

On Tuesday, Senate Majority Leader Harry Reid announced that he and GOP leaders were going to attempt to work towards a solution that would finally address those stalled appointments – 7 in total, including Cordray’s. Minutes later, in a vote of 71-29, the deal was done and Cordray is confirmed as the new CFPB chief. The president’s choices for CFPB, the National Labor Relations Board and a few others come full circle. Just like that. It’s been years in the making, which leads many to believe what the hold up was, other than typical political bickering.

Hensarling Interference

Many have wondered why Cordray would subject himself to the brutality dished out by some our elected officials. We might never know why, but Cordray stuck it out and once the Republicans resigned themselves to the fact that CFPB was here to stay, they threw in a couple of stipulations and in one fell swoop, it was done.

What we’re wondering is how Texas Republican Jeb Hensarling feels about this latest confirmation. He’s been vehemently opposed to Cordray and the entire CFPB from day one. He’s not made it a secret, either. In fact, he’s been the voice of the Republican party ever since President Obama signed the 2010 CARD Act into law. He’s been confrontational and demanding unrealistic answers for questions that were being addressed to the wrong agencies. Hensarling raised the bar this past April when he mailed a letter to Cordray insisting he wasn’t qualified to run the agency. Among other things, the letter said,

Absent contrary guidance from the United States Supreme Court, you do not meet the statutory requirements of a validly-serving director of the CFPB, and cannot be recognized as such.

Hensarling continued on his one man mission while routinely taunting him with promises that he would see him out of the agency and that Congress had that right under the Dodd Frank financial laws. By law, the committee can receive this testimony only from a director who is properly appointed in accordance with the Constitution and the Dodd-Frank Act. It never went any further than that, at least as far as Cordray was concerned because he didn’t answer to Hensarling. Turns out he was right. On Tuesday, the Senate voted 66-34 to confirm Richard Cordray as director of the Consumer Financial Protection Bureau. That, at least, puts to rest Hensarlings whining about Cordray’s authority, or rather, the lack of.

The Romney Factor

Had Mitt Romney won the election last year, there likely wouldn’t have been any kind of confirmation hearings since Romney had sided with the bankers and campaigned on disbanding CFPB were he elected. He wasn’t, of course, and that meant CFPB would live to battle another day. Cordray has been acting director since the consumer watchdog group was founded. Congress, however, refused to acknowledge Cordray’s role. If Republicans believed millions of campaign contributions from the nation’s biggest banks would be enough to take over the White House, they were wrong.

What they miscalculated was the level of frustrations Americans feel when it comes to their personal finances. Credit card debt and student loan debt are the two newest curse words. The fact that the economy is growing a snail’s pace, complete with a matching unemployment reduction, it’s entirely likely CFPB is being viewed as the saving grace for the American consumer.


The role of CFPB was then, and remains so today, to provide assistance to American consumers who were being shortchanged or who were experiencing abusive financial practices. Initially, many believed Elizabeth Warren would be named as director. She too has been adamant in her belief that the time for a watchdog group such as this was long overdue. During a hearing earlier this year, Elizabeth Warren, who was at one time considered to be the frontrunner for Cordray’s job, showed her strength during a Senate Banking Committee. With guns loaded, her presence was felt immediately. The hearing surrounded the oversight of the Dodd-Frank Act.

If anyone was wondering whether she harbored bitter feelings for not being named to the post, those questions were soon answered when it became clear she held no grudges. In fact, she was the one who made the announcement on Tuesday that Cordray was officially the agency’s director. Her sole purpose was to demand answers from Congress on how it could collectively protect the nation’s big banks.

If they can break the law and drag in billions in profits and then turn around and settle paying out of those profits, then they don’t have much incentive to follow the law. The question I really want to ask is about how tough you are.

If the members believed they’d be able to bypass her, they soon learned just how wrong they were. Not only did members of Congress have to worry about the mere presence of CFPB, but they also had a formidable pairing with Cordray and Warren.

Warren has been aggressive and her no holds barred mindset allowed her the opportunity to demand answers from policy makers on how they enforce these new financial laws. At one point, Alisse B. Carter, SEC chairperson, was more than happy to respond with her assurances that if the banks were behaving in a manner that would justify tougher precautions, then those precautions would be put into place. That’s not what Warren asked, though,

Can you identify the last time you took the Wall Street banks to trial?

Carter insisted she’d get back with Warren on those exact numbers.

Cordray is Confirmed, Now What?

This appointment ensures Cordray is safe through 2018. As part of his contract, he can choose to resign at any time; however, Congress can’t touch him in any kind of power struggle. Further, Congress can’t interfere with CFPB’s efforts. In other words, the bullying is over. Keeping the banks honest is one of the biggest purposes the agency serves. Even as the negotiations went back and forth, CFPB has continued in its own mission of protecting consumers. It’s secured more than $425 million on fines and has addressed close to 150,000 consumer complaints. The complaints run the gamut, from credit card fraud to identity theft to problems with student loans. It should also be noted that in any given month – with no exception – there has been some big change or announcement out of the agency on a case it’s closed, a fine it’s put into place, a record broken with handling consumer complaints and more.

CFPB has met all of its deadlines – all of them. The agency itself is relatively small with limited employees; however, it’s taken on the biggest names in the financial sector, including the big banks – Wells Fargo, Citi and even Chase. It’s gone head to head with the big credit card companies, including Bank One and American Express and it’s put into place a database that is practically foolproof. It’s not foolproof because of the massive algorithms built in, but rather, the small team makes it their collective business to handle the complaints in a proficient and cohesive manner.

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