Bloomberg is reporting that President Obama will nominate former Ohio Attorney General Richard Cordray to be the first director of the Consumer Financial Protection Bureau (CFPB), removing former Harvard Law Professor Elizabeth Warren from contention. Of course this nomination might not amount to anything, as Senate Republicans continue to oppose any nominee until changes are made to the CFPB to improve its accountability and transparency.
Cordray is still somewhat an unknown. His service as Ohio AG was relatively short, filling in the remaining term of the previous AG who left under scandal. Cordray was then defeated by former Sen. Mike DeWine.
One of Cordray’s first actions as AG was to abandon a baseless and misguided suit against paint-makers for long-ago lead paint violations. After Rhode Island’s Supreme Court threw out a similar suit, Ohio remained the last hope of the trial bar’s shakedown of the paint manufacturers. But then one of the defendants was Ohio’s Sherwin Williams, so at least Cordray knows not to mess with the politically powerful (so he’ll be a perfect fit in the Obama administration).
Cordray did his best to bring the Ohio foreclosure process to a near standstill, with repeated litigation against lenders. So it should be no surprise that as CFPB director he will make sure that no borrower ever has to repay any obligation ever again (OK, a little exaggeration there). He also managed to go one step beyond the usual practice of state AG’s outsourcing “justice” to the trial bar and invited non-profits, like ACORN, to supplement Ohio’s consumer complaint process. As if Ohio didn’t have enough legitimate consumer complaints to handle.
All this aside, the problem with the CFPB is less who runs it than its flawed structure and basis. In all likelihood, the CFPB will help do for consumer credit what the federal government has done to the mortgage market, which is screw it up royally and leave the taxpayer holding the bag.