This week, the Senate Banking Committee approved Richard Cordray's nomination to head the newly created federal Consumer Financial Protection Bureau. The party-line vote -- 12 Democrats for the nomination, 10 Republicans opposed -- sets up a battle on the Senate floor that has nothing to do with the former Ohio Attorney General's qualifications and everything to do with protecting financial institutions from needed oversight.
Congress created the consumer bureau after it became clear that predatory lending practices led to a tsunami of underwater mortgages, mortgage defaults, foreclosures, the near-collapse of the housing industry, and recession. Northwest Ohio and especially Toledo were particularly hard hit. The agency's job is to protect consumers from a repeat performance by the financial industry.
But Republicans, including Ohio Sen. Rob Portman, have vowed to hold Mr. Cordray's nomination as director hostage until the agency is made more transparent and accountable. What they really want is to water down the bureau's power until it is business as usual for financial institutions.
People in Ohio should not be surprised. The state's new Republican leadership lost no time cutting funding to the Ohio Consumers' Council, which protects the interests of residential consumers against powerful utility companies. Last month, the agency's chief quit in protest.
Trusting financial institutions to regulate themselves is how the United States got into the current economic mess. Yet other than the consumer bureau, Washington has done nothing to hold bankers, mortgage lenders, and others responsible for the abusive practices that contributed to the financial crisis.
Polls show that a majority of Republican, Democratic, and Independent voters want to see reform in the financial industry and support a single agency to protect consumers from financial companies. The Occupy Wall Street protests, while they lack focus, reinforce the poll finding.
Mr. Cordray proved his worth as a consumer advocate in Ohio, where as attorney general he recovered more than $2 billion for Ohio's retirees, investors, and business owners. His integrity, intelligence, and commitment to fair-minded public service has won support for his nomination from business leaders such as the chairman of Limited Brands Inc. and even the president of the Ohio Bankers League, whose members the federal bureau will regulate.
Republican senators have threatened to filibuster the nomination until they get what they want, which is to remove any hope of reining in financial abuses. As Warren Buffett noted recently about taxing the rich: "There's been class warfare going on for the last 20 years, and my class has won."
And there is no question which side Republicans are on.
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