President Obama's new consumer bureau chief vowed to work through the controversy over his appointment and said the fruits of his agency's efforts will prove critics wrong.
Richard Cordray steered clear of firing back against Republicans who have called his agency too powerful and his appointment an affront to the Constitution. Instead, he maintained that getting the Consumer Financial Protection Bureau (CFPB) up and running is his top priority and will serve as the ultimate rebuttal to those claims.
Cordray found himself at the center of a partisan battleground Wednesday, after President Obama decided to circumvent GOP opposition to his nomination and recess-appoint him to head the bureau. But Cordray tried to stay above the fray, even offering kind words to Republicans who have opposed the bureau he now runs every step of the way.
"We really have the same interests, I believe, at heart. I'm not someone who impugns someone's motive," he said. "People are always trying to do what they think is right. We may just disagree on what that is."
He added that he hoped the CFPB will eventually be able to work with both parties.
Obama nominated Cordray to head the bureau this summer, but Senate Republicans blocked the selection, arguing structural changes were needed to make the bureau more accountable. Republicans also tried to head off a recess appointment by holding several brief pro forma sessions during longer breaks, as Senate Democrats did to head off similar appointments under President George W. Bush.
But Obama pressed ahead with Cordray’s appointment despite those sessions, arguing they were gimmicks and could be ignored.
Obama's decision has incensed Republicans and has led to lawsuit threats from industry groups. But Cordray refused to entertain any argument that Obama's recess appointment is in any way questionable.
"The appointment is valid. I am now the director of the bureau," he said.
When asked if the controversy surrounding his appointment would slow the agency's work, Cordray was adamant. "The answer to that is no," he said.
Cordray wasted little time as director, as the bureau announced Thursday it was launching its nonbank supervision program.
Without a director, the CFPB could supervise banks but could not expand its oversight to cover such things as payday lenders, mortgage servicers or private student loan providers. Because of Cordray’s recess appointment, the bureau will now dispatch examiners across the country to visit such institutions.
He promised the new agency would not be afraid to use its robust enforcement power to ensure financial institutions are meeting consumer protection laws.
“The consumer bureau will make clear that there are real consequences to breaking the law,” he said.
He also indicated that while the CFPB so far has focused on making the terms of financial products more clear, the agency also will look to crack down on practices it finds particularly egregious.
"Consumers need to be better informed, [but] there are some practices that occurred in the market that are unacceptable and need to be fixed," he said.
Appearing at the Brookings Institution, Cordray sought to personalize what the bureau's work could mean for the American people.
“We need to understand that we are not talking about some impersonal abstraction, not about somebody 'else,' " he said, according to his prepared remarks. “We are talking about each one of us: our mothers and fathers, our sisters and brothers, our sons and daughters.”
The CFPB was created by the Dodd-Frank financial reform law. It is the only agency with the sole priority of protecting consumers in the financial marketplace.
The former Ohio attorney general began his opening remarks by noting that consumer financial products play a key role in the economy and “can make our lives better.”
He also warned that such products hold many dangers, rattling off tales of “outrageous ... nightmares” that people across the country have experienced, such as “hidden fees and exploding interest rates” that have “infected” consumer products.
“The financial marketplace can be a potent arena that helps people find and seize opportunity; it should not condemn them to bewildering failure,” he said.