EDITORIAL: Consumer watchdog: Ex-Ohio AG is a smart choice for key agency

EDITORIAL: Consumer watchdog: Ex-Ohio AG is a smart choice for key agency

Jul 25, 2011 (Pittsburgh Post-Gazette – McClatchy-Tribune Information Services via COMTEX –
The choice of former Ohio Attorney General Richard Cordray to head the federal Consumer Financial Protection Bureau could add some bite to President Barack Obama’s promise to protect consumers against unscrupulous lenders. That is, unless Senate Republicans pull the agency’s teeth as the price for confirming the president’s nominee.

Mr. Cordray’s reputation as a consumer advocate is that he’s tough, smart and honest. As Ohio attorney general, he successfully sued financial giants Bank of America and American International Group. And he took on the major securities-rating agencies. In all, he recovered more than $2 billion for Ohio retirees, investors and business owners.

A graduate of Michigan State University, Mr. Cordray received a master’s degree in economics from Oxford University and a law degree from the University of Chicago, where he also was editor-in-chief of the Law Review. He is considered by many to be more of an academic than a politician. In 2010, Businesweek.com said: «His ethics appear above reproach.»

At the same time, he is no ideologue or starry-eyed idealist. David Rothstein, a researcher at Policy Matters Ohio and a fellow at the New America Foundation — both are nonpartisan think tanks — says that the five-time Jeopardy! champion bases his conclusions on research, not ideology.

«He doesn’t think all banks are bad, and he doesn’t think that all financial products are bad,» Mr. Rothstein told the Huffington Post. «But if he sees a problem and identifies it through research, he’s going to pursue it.»

That makes financial institutions and the politicians who serve them nervous. So Senate Republicans have threatened to not to confirm the 52-year-old from Grove City, Ohio, unless they get changes they say would improve accountability and transparency but in reality would water down the effectiveness of the consumer bureau, which opened its doors Thursday.

The Republican-led House has approved a bill to strengthen the veto power of the Financial Stability Oversight Council over the bureau’s decisions. It would also install a five-member commission rather than a single director and delay transfer of powers to the new agency.

Elizabeth Warren, the Harvard University law professor who was the driving force behind the bureau and was the favorite of many liberal Democrats to head it, said last week that Republicans who want to «cripple» the consumer bureau should «remember that the financial crisis — and the recession and job losses that it sparked — began one lousy mortgage at a time.»

Despite some tough talk, Washington has not held financial institutions responsible for abusive lending practices that contributed to the nation’s economic crisis. The consumer bureau, created by the 2008 Dodd-Frank Wall Street Reform Act, which Republicans opposed, changes that.

Mr. Cordray, a former Ohio state treasurer, county treasurer and state representative, will be as strong a voice for average Americans as he was for ordinary people in Ohio.

The Jeopardy! clue: The right man for the job. The question: Who is Richard Cordray?

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