According to a New York Times story that broke just minutes ago, former Ohio Attorney General, Richard Cordray has been chosen to head the Consumer Financial Protection Bureau (CFPB).
Mr. Cordray came to national attention for his aggressive investigations of mortgage foreclosure practices while he was attorney general.
President Obama notably chose to pass over Harvard Law Professor, Elizabeth Warren, who was the driving force behind creating a consumer agency. Ms. Warren has been widely criticized by Republicans as anti-business in the months leading up to Mr. Cordrays eventual appointment.
However, even with lightning rod Elizabeth Warren out of the picture, Mr. Cordray does not have a clear path to confirmation. Forty four Republican Senators have signed a letter refusing to vote for any nominee chosen by President Obama and have expressed concern that the new consumer agency simply has too much power and not nearly enough oversight.
Elizabeth Warren has written that the CFPB would be modeled on the Consumer Product Safety Commission. In a scathing February criticism of the new consumer agency, Weekly Standard Editor, Fred Barnes, cites key differences between the Consumer Product Safety Commission and the CFPB, summarizing many of the Republican concerns:
The commission is a traditional regulatory agency funded by Congress and thus accountable to Congress. The bureau is authorized to receive up to 10 percent of the operating budget of the Federal Reserve (or as much as $500 million), which raises its own funds. It will be loosely part of the Fed, but not subject to the Fed’s authority.
Another important difference is what the bureau is empowered to target. For decades, “unfair or deceptive acts or practices” have been subject to federal jurisdiction. But for the CFPB, the word “abusive” was added. This means it can go after financial products that aren’t deceptive and the terms of which are fully understood by borrowers. And the bureau will define what is abusive and what isn’t.
According to the New York Times story, Ms. Warrens supporters have thrown luke warm support behind Mr. Cordray, with one Warren fan insisting:
Elizabeth Warren was the best qualified to lead this bureau that she conceived
Similar Posts:
- National Association of Credit Services Organizations
- National Association of Credit Services Organizations
- Obama gets personal with personal finance journalists
- Denied Credit? At Least You Get Your Credit Score for Free
- Boston Bankruptcy Foreclosure News
