Tomorrow the Senate Banking Committee will hold hearings on the appointment of Richard Cordray as Director of the Consumer Financial Protection Bureau.
With little doubt, the hearings will be contentious. Senate Republicans sent a letter to President Obama pledging to block the nomination until there were concessions that would completely revamp the agency. Republicans insist that the structure of the CFPB be changed to a commission instead of a single director and that Congress control the budget.
But the hearing could set up a clash, as it did in 2011, of the president and his allies in Congress against Republicans who say Cordray's job has too much power and too few controls. Senate Republicans blocked Cordray's confirmation in late 2011 with a filibuster-like move. Later, while Congress was on break, Cordray received a recess appointment. Republicans are still unhappy with that.
I can think of five good reasons why Republicans should confirm the appointment of Cordray.
1.Cordray has been serving as Director under a recess appointment for the past year. During that time he has operated the Bureau in an open and honest manner. He has proven himself to be a very pragmatic and extraordinarily talented leader who has earned a reputation for thoughtfulness and fair play. Maybe the CFPB is not perfect. But, it surely is not an organization bent on the destruction of either banks or business. After a year and a half of operation, the CFPB largely earns kudos from those industries it regulates. The CFPB is not the oppressive and destructive demon that those on the political extreme claim it to be.
2.Richard Cordray has done a fine job in his role as Director of the CFPB. He is an extraordinarily talented man who is no ideologue. In an interview with Bloomberg Television, Cordray said that he does not "think about politics" while working at CFPB. "I'm in a job that doesn't mix with politics," he said. I think his track record has proven him to be true to his word.
3.Cordray is one of the brightest men I have met in Washington. His credentials are impeccable. He is Phi Beta Kappa and was a Marshall Scholar at Oxford University. Later, he was editor-in-chief of the University of Chicago Law Review and subsequently served as a law clerk for Judge Robert Bork on the U.S. Court for the District of Columbia Circuit, and after that, Justice Anthony Kennedy of the Supreme Court of the United States. As if that were not enough, he is an undefeated five-time Jeopardy! champion. He understands the business community at the grass-roots level. He has been a member of his local Chamber of Commerce in Grove City, Ohio for more than 20 years. His first job out of high school was minimum wage at McDonald's.
4.When first appointed Director, he offered reassurances to the business community that the bureau is not the enemy:
We will be not only protecting consumers, but we will be supporting honest and responsible businesses... who will be better off in the marketplace when they're protected against fraudulent, deceptive competitors, and to have even-handed rules of the road that everybody lives under will be a good thing.
It is this facet of Cordray's character that has been so much different than the expectation of the business community. The CFPB, charged by law to protect consumers, has an equally important role to protect honest businesses. Mr. Cordray has repeatedly emphasized the value honest businesses accrue when dishonest businesses are driven out of the marketplace. He has made good on his promise.
5.It is a bogus argument when Republicans claim that the CFPB under a single director would have too much power. The OCC (Office of the Comptroller of the Currency) has for the past 150 years operated under a single director. The OCC supervises more than 2,000 national banks and federal savings associations and about 50 federal branches and agencies of foreign banks in the United States. These institutions comprise nearly two-thirds of the assets of the commercial banking system. That is a pretty damn big job. But we entrust it to a single director, Thomas Curry. I would say he does pretty well.
I cannot think of a better man for the job. Richard Cordray deserves a permanent appointment as Director of the CFPB right away.
It is the right thing for America, for businesses and for consumers.