Richard Cordray, formerly Ohio's attorney general and most recently enforcement chief at the Consumer Financial Protection Bureau (CFPB), will be formally named Monday to lead the new regulatory agency.
President Obama's selection of Cordray will offer some certainty about the bureau's leadership after months of speculation. Several names had been floated, including Harvard professor Elizabeth Warren, the bureau's chief architect now advising the administration on its launch.
In the end, Warren was not the administration's choice. But while she had been sure to face ample opposition in the Senate, Cordray's nomination too could be an uphill battle. Republicans have said they would oppose any nominee without significant structural changes for the new bureau, leading many to predict the White House will attempt a recess appointment. Among the GOP's desired changes is to make the bureau subject to the appropriations process, and have bureau decisions made by a commission rather than one director.
For the collection industry, and larger accounts receivable management industry, the CFPB will have the authority to enforce the Fair Debt Collection Practices Act and other collection laws. The Federal Trade Commission has handled enforcement until now.
How quickly Cordray can be confirmed or recess-appointed has real-world implications not only for the bureau but also the industry. Under the Dodd-Frank Act, the new regulatory agency will formally be launched July 21. Without a permanent director in place, the CFPB has some authority, including crafting policy for mainstream banks and supervising commercial banks with over $10 billion in assets. Yet other responsibilities mandated by the law, including monitoring nonbanks for consumer safety, cannot take place until the bureau has a formal leader.
A former Ohio state treasurer, Cordray also spent time as a law professor and Ohio state representative. He was also the state's first ever solicitor general.
"Richard 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 CFPB and looking out for ordinary people in our financial system," Obama said in a White House press release.
Despite Warren's not being chosen, Obama credited her with inspiring the bureau's formation.
"I also want to thank Elizabeth Warren 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," Obama said. "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."
