GOP chairman demands investigation into whether Cordray violated election law

GOP chairman demands investigation into whether Cordray violated election law
© Greg Nash

House Financial Services Committee Chairman Jeb Hensarling (R-Texas) is asking federal watchdogs to investigate whether the director of the Consumer Financial Protection Bureau (CFPB) violated federal election law.

Hensarling asked the Office of Special Counsel in a letter dated Friday to investigate whether Richard Cordray broke the Hatch Act, which bans federal employees from running for elected office.

Rumors have been circulating that Cordray, a former Democratic Ohio attorney general, will resign in September to run for Ohio governor. But he cannot formally begin his campaign until he steps down from the CFPB. The unexpected release of a controversial CFPB rule targeting forced arbitration clauses sparked more talk that Cordray is aiming to finish as many of the agency’s projects as possible before leaving.

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The speculation surrounding Cordray’s future escalated when an Ohio Supreme Court justice told Cleveland.com that the CFPB director would run for governor, citing a mutual friend. Justice Bill O’Neill, also a Democrat, said he had been considering a run, but wouldn’t run against Cordray.

Hensarling asked the special council to investigate whether Cordray broke the law by allegedly asking the mutual friend to tell a potential primary rival about his intention to run. The chairman said if that happened, “it may reasonably be construed as evidence that he undertook a campaign to secure a nomination for partisan political office in contravention of the law.”

A CFPB spokesman declined to comment on Hensarling's letter.

Senate and House lawmakers from both parties interviewed by The Hill last week said they haven’t heard anything about Cordray’s plans.

Hensarling’s letter is the latest flashpoint between the GOP and Cordray. Republicans have long called Cordray a partisan abusing the bureau’s powers to boost his profile ahead of a gubernatorial campaign.

Republicans at a hearing in April discussed whether Cordray should be fired, and expressed frustration with President Trump for not removing the director.

“For all of the harm caused to consumers, [Cordray] should be dismissed by the president,” Hensarling said. “Mr. Cordray, I’m surprised you are here.”

House Republicans have also sought to rein in the CFPB’s expansive power, passing a bill in June to roll back much of the Dodd-Frank Act that established the agency. The CHOICE Act would turn the CFPB, which Republicans consider abusive and unaccountable, into the Consumer Law Enforcement Agency. That agency would not control its own budget, its director would be appointed by the president, and it would lose its authority to crack down on “unfair, abusive and deceptive practices.”

Democrats have attempted to defend Cordray and the CFPB against GOP attacks, claiming the bureau and its director have been crucial allies for cheated consumers.

"I will be with you forever,” Rep. Maxine Waters (Calif.), the Financial Services Committee’s ranking Democrat, said to Cordray in April. "I would hope this president, though I doubt it, has the wisdom to keep you on."