Lucas,
On Monday, almost a year after passage of the historic Wall Street reform legislation, President Obama finally nominated a director for the Consumer Financial Protection Bureau (CFPB).
Public Citizen, and tens of thousands of our supporters, had urged the president to nominate Elizabeth Warren -- the perfect person for the job.
Warren conceived the idea of the CFPB. She was a tireless advocate for its inclusion in the Wall Street reform legislation, and creation of the bureau is the signal achievement of that legislation. She has done an excellent job leading the team that is setting up the agency. She knows the issues better than anyone. She is an unparalleled communicator about the importance of protecting consumers from predatory financial interests.
Elizabeth Warren should be running the CFPB. The only reason she's not is that Wall Street did not want her to have the job and the Obama administration decided not to take on Wall Street interests.
At Public Citizen, we're disappointed and outraged by the decision not to nominate Warren.
Nonetheless, the person the president did nominate, Richard Cordray, has the potential to be a superb leader for the new agency. We will fight to have the Senate take up his confirmation. If Senate Republicans block his confirmation, we will urge the president to appointment him during a Senate recess.
The CFPB is not just another among the alphabet soup of agencies in Washington. There are more than half a dozen financial regulators, but all of them prioritize ensuring the stability of the banks and other institutions they regulate. In some cases, they actually applaud rip-offs of consumers, on the grounds that this helps make banks stronger. More generally, they subordinate their duty to protect consumers far beneath their concern for banking stability.
Unlike the other financial regulators, the CFPB has the sole mission of protecting consumers. It can crack down on the deception, trickery, and rip-offs so prevalent in the financial industry.
This will save consumers billions and billions of dollars.
It might also save the financial industry from itself. As the mortgage crisis makes clear, while systematically deceiving consumers may juice profits in the short run, it can imperil the entire financial system in the medium term.
Richard Cordray recently served as Ohio Attorney General. He has firsthand experience taking on financial industry wrongdoers and a distinguished record of defending consumer interests. In recent months, he's been working with Elizabeth Warren as General Counsel of the CFPB.
All signs are that Wall Street intends to oppose Cordray's nomination. In fact, 44 Senate Republicans have said that they will not confirm anyone to the position until the agency is restructured in ways that would undermine its authority to protect consumers. Last weekend, Senator Richard Shelby (R-Ala.), reiterated that the Republicans would stick with this position, whether or not Elizabeth Warren was the nominee.
It is imperative that Cordray be given the job of running the agency quickly, whether through confirmation or recess appointment. The agency won't be able to do its job nearly as effectively or aggressively without a formal leader. By law the agency does not gain some of its authority until a director is in place.
In the weeks ahead, you'll be hearing more from us about what we can do to get Cordray confirmed or recess-appointed, and how we can work together to make the CFPB the powerful agency we need.
Yes, it's distressing that the president did not nominate Elizabeth Warren. But now it's time to work to get Cordray in as director, and to protect the CFPB.
In announcing her enthusiastic support for Cordray, Warren wrote , "Today, I'm celebrating -- but I'm not taking my eye off those who want to cripple this agency. We got this agency by fighting, we stood it up by fighting, and, if takes more fighting to keep it strong and independent, then we can do it."
That's exactly what we're going to do.
Onward,
Robert Weissman
President, Public Citizen