Today, he is the chief enforcement officer for the fledgling watchdog. When the bureau officially opens this summer, Cordray will head a federal team with wide authority to write and enforce rules that will govern many of the firms that he butted heads with as a state official.
“It offered a possibility to continue to do some of the most important work I felt I was doing as a state attorney general,” Cordray said in a recent interview in his new office in Washington, “and in many respects, on a better footing, from a better foundation, with better tools, better authority and on a 50-state basis.”
Many state attorneys general, who have complained that their efforts to enforce stricter consumer protections have been stymied by federal regulators over the years, have echoed consumer advocates in cheering Cordray’s appointment.
“He’s got a gold-plated resume and a wealth of experience. . . . He’s very reasonable, he’s very smart, he’s very fair,” said Illinois Attorney General Lisa Madigan. “He understands the financial, the economic, the fiscal things, as well as the law enforcement side of it. . . . To me, that’s the type of person you want in that position.”
Representatives of the banking industry have reacted with far less enthusiasm, saying they fear that Cordray will overreach in his new role and burden them with unnecessary new oversight.
“Richard Cordray was known as sort of a regulatory zealot in Ohio and generally was pretty tough on the financial services industry within his state,” said Camden Fine, head of the Independent Community Bankers of America, echoing others in the financial industry who were reluctant to speak publicly. “We have concerns about how he will handle enforcement of CFPB regulations and the new rules that the CFPB will be pumping out. . . . The jury is still out.”
The 51-year-old Ohio native took a circuitous, and in many ways accidental, path on his way to becoming a Washington regulator, including a law degree from the University of Chicago, a stint as a clerk for Supreme Court Justice Anthony M. Kennedy and a five-day run as a “Jeopardy” champion in the late 1980s.
After losing races for the U.S. House and Senate, Cordray won a special election in 2008 to replace Attorney General Marc Dann, who left during the middle of his term after a sexual harassment scandal. Well before the “robo-signing” issue triggered a national furor last fall, Cordray aggressively went after financial firms for what he perceived as fraudulent and shoddy mortgage servicing and foreclosure practices.
In 2009, he sued multiple-loan servicing companies, alleging that they had violated state consumer laws. Last year, he filed suit against GMAC Mortgage and its parent company, Ally Financial, alleging fraudulent, unfair and deceptive practices. Along the way, he lobbied for the creation of the CFPB, which had become a controversial topic in Washington.
Several days after he lost his bid for reelection in November, part of a wave of Republican victories in Ohio, Cordray got a call from Elizabeth Warren, the Harvard law professor appointed by President Obama to set up the new bureau. “I just really hadn’t given much thought to anything yet, and here she was recruiting me,” he said. “It was unexpected.”
Despite his initial reservations about seeing his wife and 12-year-old twins back in Ohio only on weekends, Cordray agreed to join the new bureau.
“Richard Cordray has the vision and experience to help us build a team that ensures every lender in the marketplace is playing by the rules,” Warren said in a December statement announcing Cordray’s hire.
These days, Cordray’s time is a mixture of looking at the big picture and small details. For every meeting about changes to mortgage-servicing practices — an issue he still cares about intensely — there are personnel issues that demand attention. Questions about the bureau’s overall enforcement philosophy compete with questions about IT systems and office space.
“It kind of goes in fits and starts,” Cordray said. “But you can see progress. . . . Getting off to a good start with this bureau will set it on a good footing for years to come.”
In December, he was quoted in a Columbus Dispatch article saying he intends to run for governor of Ohio in 2014. But ensconced in his small office on L Street, he now takes a more measured approach about his political future.
“Someday, if and when I’m no longer here, I will think about that again,” he said. “In the meantime, I’ve had to put that to the side and focus on my job here. And I’m totally happy with that.”