Mystery surrounds Cordray’s plans

Mystery surrounds Cordray’s plans
© Greg Nash

It’s become a guessing game in Washington: Is Richard Cordray running or not?

The director of the controversial Consumer Financial Protection Bureau (CFPB) is said to be mulling a bid for governor of Ohio, where he served as attorney general and state treasurer, and could announce his plans at any moment.

But there’s a catch.

Federal law prevents Cordray, a Democrat, from campaigning while he serves as director of the CFPB. That’s forced lawmakers, reporters and industry lobbyists to scrounge for clues about his intentions.


Leaders of congressional committees and trade groups that interact frequently with Cordray speculate that his relaxed demeanor in recent meetings indicates he’s headed out the door. Cordray’s allies say nothing has changed.

Meanwhile, Republicans and business groups that have long sought to rein in Cordray and the CFPB are convinced a recent uptick in bureau action shows the director is trying to finish up several high-profile rules before he steps down.

“It seems like a lot of Republicans are trying to wish him away,” said Rep. Dan Kildee (Mich.), a senior Democrat on the House Financial Services Committee, who was a Michigan county treasurer while Cordray was Ohio’s.

Cordray can’t discuss a future run or make moves to set up a campaign because of the Hatch Act, a federal law barring government employees from running for office. To start a campaign, he would have to resign.

Steven Spaulding, chief of strategy at open-government nonprofit Common Cause, said Cordray could likely have informal conversations about a potential campaign without violating the Hatch Act. But actions like commissioning political polls, fundraising and setting up a campaign staff could violate the law.

“The test isn’t what the rumors are,” Spaudling said. “The test is what he’s doing to test the waters or preparing for a campaign.”

Cordray has said he has no plans to leave before his term ends in July 2018, but that hasn’t stopped his detractors from wishing for an early departure. Critics have called Cordray a political grandstander, accusing him of abusing the bureau’s power to become the next Elizabeth WarrenElizabeth Ann WarrenHatch mocks Warren over DNA test with his own results showing '1/1032 T-Rex' Warren DNA test reinvigorates fight with Trump On The Money: Deficit hits six-year high of 9 billion | Yellen says Trump attacks threaten Fed | Affordable housing set for spotlight in 2020 race MORE, the Democratic Massachusetts senator who rose to political fame as the architect of the CFPB.

Cordray has led the CFPB since it was established in 2011. The agency was created under the Dodd-Frank financial reform law and intended to police predatory lending.

While Democrats have lauded the bureau’s high-profile crackdowns and the $12 billion in restitution it has collected for consumer fraud, critics have accused Cordray of using the CFPB to boost his name recognition ahead of a gubernatorial run.

Republicans on the House Financial Services Committee have accused the agency of penalizing Wells Fargo, which admitted to creating millions of fraudulent checking and savings accounts, just for headlines and of speeding along a payday and car title loan rule to be released before Cordray’s departure.

Financial Services Committee Chairman Jeb Hensarling (R-Texas), who had led House efforts to limit the CFPB’s power, warned Cordray in an August letter that the recent bureau actions “suggest that your personal political ambitions may be informing decisions you are making” at the bureau.

Hensarling has also called on federal watchdogs to investigate whether Cordray violated the Hatch Act, citing media reports about his potential run for office.

Republicans on the Financial Services panel have been some of Cordray’s fiercest critics.

Republicans spent his last appearance in front of the committee in April arguing that President Trump should fire Cordray, insisting that the CFPB routinely overstepped legal and jurisdictional boundaries and prized flashy, expensive fines over consumer freedom to grab headlines.

The CFPB’s unanticipated release of an arbitration rule, recent guidelines released regarding overdraft fee disclosures and work on a rule to police payday and car title loans spurred more rumors that Cordray was whittling down his to-do list before leaving.

Rep. Roger WilliamsJohn (Roger) Roger WilliamsDems gain momentum 50 days before midterms GOP: The economy will shield us from blue wave Republicans have spent .5 million at Trump properties since he took office: report MORE (R-Texas), vice chairman of the Financial Services Subcommittee on Monetary Policy and Trade, said Cordray “was thinking about one person — himself” when the arbitration rule was released.

The arbitration rule prohibits companies from including language in contracts that prevents consumers from joining class-action lawsuits.

Cordray allies say he’s done a stellar job at the CFPB fulfilling the agency’s mission and that his critics are simply trying to smear his reputation.

Kildee praised Cordray’s tenure at the CFPB and said that he wasn’t sure if the director would run, but he criticized Hensarling’s “oddly obsessive” focus on Cordray’s future.

“I think Chairman Hensarling should focus on being chair of the full committee instead of what everyone’s next job might be,” Kildee said. 

Dennis Kelleher, president of Better Markets, a nonprofit advocating for stronger financial regulation, called theories that Cordray was abusing the bureau for a political campaign “rampant speculation and wishful thinking.”

“If you go over to the CFPB or if you’re around Cordray at all, all you will see is a guy who’s working more than full-time,” Kelleher said. “I see Rich fairly often. To me, he’s exactly the same as he’s always been.”