President Obama announces the nomination of former Ohio Attorney General Richard Cordray, right, to serve as the first director of the Consumer Financial Protection Bureau.
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WASHINGTON -- President Obama named former Ohio Attorney General Richard Cordray to lead a new consumer protection bureau Monday, and vowed to fight any efforts to block the agency's work.
"We are going to stand up this bureau and ensure it is doing the right thing for middle class families all across the country," Mr. Obama said during a Rose Garden ceremony announcing Cordray's appointment.
The Consumer Financial Protection Bureau was a central feature of a law Congress passed last year that overhauled the rules that govern the financial sector. The agency will serve as a government watchdog over mortgages, credit cards and other forms of lending when it officially begins its work on July 21.
Obama and Cordray were joined in the Rose Garden by Elizabeth Warren, a special assistant to the president who had been charged with getting the agency running. Warren is widely considered the architect of the bureau, and consumer groups wanted her to be named its leader. But she was strongly opposed by Republicans and would have faced a difficult path to confirmation.
The president applauded Ms. Warren's work as an advocate for the American public.
"She's become perhaps the leading voice in our country on behalf of consumers," Mr. Obama said of the Harvard University law professor. "She's done it while facing some very tough opposition."
Obama said he looks forward to working with Cordray and the bureau as it works to denfend consumers.
“Richard was one of the first people that Elizabeth recruited, and he’s helped stand up the bureau’s enforcement division over the past six months. So I am proud to nominate Richard Cordray to this post,” Obama said. “I look forward to working with Richard Cordray as this bureau stands up on behalf of consumers all across the country.”
Republicans have already threatened to block Cordray's Senate confirmation as well.
Cordray, 52, is considered a Warren ally and has been working with her as a director of enforcement for the agency.
Republicans fought fiercely against the creation of the bureau last year and have been trying to place restrictions on its work. In May, all Senate Republicans joined in a letter to Obama threatening to withhold their support for any nominee to the position if the White House didn't seek significant changes to the agency.
The financial industry has also expressed concerns about the agency, worrying that it would restrict new products just when companies are seeking to replace profits squeezed by the new financial rules.
The U.S. Chamber of Commerce said it had deep concerns over how Cordray would use the agency's "broad powers."
Mr. Cordray, who became that agency's first enforcement director in December, said Sunday he would not comment on Mr. Obama's plans to elevate him to the top post until after the announcement is made at a White House event.
The White House revealed its plans in a news release Sunday, saying that Mr. Cordray "has spent his career advocating for middle-class families, from his tenure as Ohio's attorney general, to his most recent role as heading up the enforcement division at the [Consumer Financial Protection Bureau] and looking out for ordinary people in our financial system."
In the release, Mr. Obama expressed his gratitude to Ms. Warren and to Treasury Secretary Timothy Geithner.
Ms. Warren is credited for coming up with the idea for the agency.
The President thanked her "not only for her extraordinary work standing up the new agency over the past year, but also for her many years of impassioned leadership and her fierce defense of a simple idea: Ordinary people deserve to be treated fairly and honestly in their financial dealings.
"This agency was Elizabeth's idea, and through sheer force of will, intelligence, and a bottomless well of energy, she has made, and will continue to make, a profound and positive difference for our country."
Ms. Warren was one of three women on Time's cover whom the magazine touted as the "New Sheriffs of Wall Street" for their efforts to hold the investment community accountable after the near-collapse of the banking industry. The other two were Sheila Bair, Federal Deposit Insurance Corporation chairman, and Mary Schapiro, Securities and Exchange Commission Chairman.
Some consumer-advocacy groups had campaigned for Ms. Warren to get the agency's top job, although they generally accepted Mr. Obama's plans to nominate Mr. Cordray.
"With her track record of standing up to Wall Street and fighting for consumers, Elizabeth Warren was the best qualified to lead this bureau that she conceived -- and we imagine Richard Cordray would agree. That said, Rich Cordray has been a strong ally of Elizabeth Warren's, and we hope he will continue her legacy of holding Wall Street accountable," a statement issued by Stephanie Taylor, co-founder of the Progressive Change Campaign Committee, said. More than 350,000 petition signatures were gathered at WeSupportWarren.org.
Ms. Warren told the Columbus Dispatch she chose Mr. Cordray for the job he's held within the agency, and that she believes he will "make a stellar director."
"Rich has always had my strong support because he is tough and he is smart -- and that's exactly the combination this new agency needs," she said.
U.S. Sen. Sherrod Brown (D., Ohio), chairman of the Senate Banking Subcommittee on Financial Institutions and Consumer Protection, said he expects the Senate to confirm Mr. Cordray.
"Rich Cordray is one of Ohio's most talented public servants who is strongly committed to protecting Ohio's consumers and investors," said Mr. Brown in a statement. "As Ohio's attorney general, he was a strong voice for Ohioans who struggled to stay in their homes, consumers who faced unfair practices by big banks, and pension funds that provided retirement security for teachers, secretaries, and janitors."
The senator said Mr. Cordray shares Ms. Warren's "vision that consumers deserve a voice that is as loud and powerful as that of the financial services industry."
Mr. Cordray is viewed as a less risky pick than Ms. Warren, whom the Washington Post said in a story Sunday has alienated Republican leadership.
There may still be a battle. According to Reuters news service and the Associated Press, 44 of 46 Senate Republicans vowed in May to block confirmation of any nominee unless the agency's leadership was changed to a board instead of a single director, its budget was subject to congressional approval, and other financial regulators had a greater say in its regulation supervision of banks.
"Congress raised concerns about the lack of transparency and accountability, but the Obama Administration still hasn't addressed those concerns," said John Ashbrook, a spokesman for Senate Republican leader Mitch McConnell, in a statement after it was learned that Mr. Cordray would be nominated.
The federal consumer-advocacy bureau, an agency under the Federal Reserve system, investigates abuses in a broad range of issues, including mortgages, credit cards, student loans, and nonbanking financial activities.
The bureau was established by the Wall Street Reform and Consumer Protection Act that Congress passed and Mr. Obama signed into law in 2010.
More information about it is at consumerfinance.gov.
Mr. Cordray is a graduate of Michigan State and Oxford universities and of the University of Chicago Law School. He was a Jeopardy! game show champion in 1987.
He was Ohio's attorney general from January, 2009, through January, 2011.
The White House said he recovered more than $2 billion for Ohio's retirees, investors, and business owners and took steps to help protect its consumers from "fraudulent foreclosures and financial predators."
He is a former Ohio state treasurer and Franklin County treasurer.
Mr. Cordray was an adjunct professor of the Ohio State University College of Law for 13 years.
He spent two years in the Ohio House of Representatives in the early 1990s and was the first solicitor general in Ohio's history.
Information from The Blade's news services was used in this report.
Contact Tom Henry at: firstname.lastname@example.org, or 419-724-6079.
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