Obama Appoints Richard Cordray as Chief of CFPB

Photo-Doug Mill, the NY Times

President Obama used the congressional recess period to his advantage Wednesday when he appointed Richard Cordray the Chief of the Consumer Financial Protection Board. The former Attorney General of Ohio officially accepted the nomination before a crowd of supporters in a Shaker Heights, OH, high school gym near Cleveland, Cordray's hometown. Republicans responded immediately, crying foul and accusing Obama of abusing the recess privilege. Cordray received majority support in the Senate, until his nomination was blocked by a filibuster.

Cordray brings impeccable credentials to his new role. He earned an MA from Oxford University with first class honors as a Marshall Scholar, and a law degree with honors in 1986 from the University of Chicago. He then clerked in the Supreme Court serving Justices Byron White and Anthony Kennedy in the late 80s and later represented the US government before the Court three times--once for George H. W. Bush and twice for Bill Clinton.

Cordray first entered public office as a Democratic politician, serving one term as an Ohio state representative in the early 1990s, but chose not to run again after district lines changed. Eventually, he served as treasurer and most recently attorney general of Ohio. As attorney general, he built a reputation for successfully winning cases against large financial services institutions, such as Bank of America and AIG, for misleading the state's pension funds. Cordray also pursued cases against financial institutions that used falsified documents to expedite foreclosures on consumers, ultimately bringing suit against Ally Financial in 2010.

Business Insider spoke with Cordray about his case against the BofA/Merrill Lynch Merger in 2009, in which he accused BofA of hiding billions in Merrill Lynch losses from their clients prior to the merger. He stated, "My understanding of a bonus is that it's a special reward for superior performance. There wasn't any superior performance for special reward; nonetheless, they wanted the bonuses. They ultimately, as best we know, got approval to pay out somewhere between $3 and $4 billion in bonuses, which was a very material element to the value of the merger. That was not disclosed to investors."

Clearly, Cordray presents a formidable opponent to those firms that exact fraud against American consumers, a protection long overdue. The CFPB will address unfair, deceptive, and abusive practices by payday lenders, private student loan providers, debt collectors, and other non-bank lenders, as well as oversight of banks with deposits in excess of $10 billion.

Ham on Wry raises a question for the Senate Republicans. Why did you schedule the pro forma sessions in the first place?  Was it not with the express intention of blocking Cordray's appointment? I am fed up with this kind of nonsense.  We need action, not posturing.