IT’S time for a Senate vote to confirm President Obama’s nomination of Ohioan Richard Cordray as director of the federal Consumer Financial Protection Bureau.
Millions of Ohioans are affected by unfair, abusive, or deceptive financial practices. In January, more than 8,000 Ohio homes were foreclosed on.
Payday lenders contemptuously ignore Ohio law, preying on mostly poor and minority borrowers with astronomical interest rates. One in five Americans has an error on his or her credit report that can’t get fixed, causing Ohioans to bombard the state attorney general’s office with complaints.
Progress toward correcting these problems and preventing them from recurring is stalled, because 43 Republican senators are threatening to block a full floor vote for Mr. Cordray, a former Ohio attorney general.
These senators want to change the bureau’s structure to reduce drastically its authority and funding. Such changes would weaken the bureau and leave U.S. consumers without a voice among federal financial regulators.
The senators argue that the bureau is too powerful and does not have enough accountability, because it has a single director and its budget does not require congressional approval. These claims are inaccurate and misguided.
The bureau’s structure, authority, and funding are not uncommon among federal financial regulators. Its independence is critical to fulfilling its mission to protect consumers.
The bureau and its director are accountable to Congress and other regulators; the Financial Stability Oversight Council can review and reject bureau regulations. The director is required to testify before Congress at least twice a year, and lawmakers can overturn any bureau regulation through legislation. Regulations also are subject to judicial review.
The bureau’s funding autonomy from Congress is an important safeguard. It allows the bureau to operate free of industry influence and political motivations that could weaken or delay consumer safeguards.
While the political drama is playing out, the bureau is using lessons learned from the financial crisis to institute sound and consistent rules that protect American consumers, without unduly burdening responsible players in the financial industry. In less than two years since it began, the bureau has made great strides:
● Returning more than $400 million to nearly 6 million consumers who were cheated by credit card companies.
● Standing up for students and families who are trapped by high-cost education loans.
● Protecting military families against illegal foreclosures and deceptive education-loan practices.
● Enabling consumers to know how much they are charged for sending money overseas, and how much their family members actually get.
● Going after fraudulent companies that collect up-front fees for help they don’t deliver to desperate borrowers.
● Beginning to monitor out-of-control credit reporting and debt collection.
● Giving consumers an effective way to complain about financial errors and misconduct.
Polls show broad public support for the bureau, across party lines. No one has questioned Mr. Cordray’s qualifications or performance. Many financial industry leaders agree that the bureau, under his leadership, has been a fair and reasonable regulator.
Yet the nomination and vital work of the bureau are in peril. It’s time to stop the attack and let the bureau do its job.
It is wrong to hold up the nomination of a qualified leader and to hold hostage a law passed by Congress, signed by the President, and supported by large majorities of Americans. It is bad for consumers, bad for responsible lenders, and bad for the economy.
Senators should show they have the best interest of American consumers at heart by holding a full vote on the Cordray nomination.
Mark Seifert is executive director of Empowering and Strengthening Ohio’s People, a foreclosure prevention counseling agency based in Cleveland.