On Tuesday the Senate Banking Committee met in executive session to vote on the nomination of Richard Cordray to continue to be director of the Consumer Financial Protection Bureau (CFPB), created in the crucible of the Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law in 2011.
Even though Mr. Cordray won approval in a party-line vote (12-10) in committee today, defeated Republicans are expected to block him when his nomination comes to a full Senate.
With more than 1,000 employees and broad powers to regulate new frontiers in financial services, Mr. Cordray, a former Ohio legislator and state attorney general, was confronted by Republican senators but praised by the woman behind the CFPB, first-term Massachusetts Senator Elizabeth Warren, a top line target of bankers, lenders and others who see the consumer-oriented agency as an unnecessary and an unaccountable obstacle to their line of business.
Senator Warren, a Harvard law professor who conceived of the CFPB and defeated Scott Brown last year due in part to efforts to birth the CFPB, called out the Republicans for withholding their approval of Mr. Cordray in an effort to take down an otherwise fledgling watchdog agency the GOP fought to defeat.
"I see nothing here but a filibuster threat against Director Cordray as an attempt to weaken the consumer agency," said Warren, according to a published report.
Ohio's senior Senator Sherrod Brown, who won a bitter and expensive race last fall, defended his fellow Democratic Buckeye, noting not one senator opposing Mr. Cordray's nomination questioned his ability to do the job. Senator Brown, who has enjoyed over 30 years in Ohio and national elected office, told Republicans to "stop fighting old battles" and focus on Mr. Cordray’s qualifications.
"Senators are blocking a nominee because they don’t like the agency that he will lead," Brown said.
Sen. Warren lauded Mr. Cordray, who she met with when he was Ohio Attorney General, for providing balance and for creating space for credit unions and other small financial institutions to "run their businesses and serve their customers without drowning them in regulations."
If the vote in committee today is a sign of how the GOP conference will address it in the full Senate, Richard Cordray, who assumed his current position in July of 2011 when President Obama made a recess appointment that has since come under fire when an appeals court ruled it unconstitutional, should expect a bumpy ride as GOP senators close ranks to oppose him to send a political message to President Obama and his allies in Congress.
Mr. Cordray's name is prominent among the names on a short list of potential Democratic candidates who can take on Ohio's first-term Republican Governor, John Kasich, in 2014. If approved Cordray will start a five-year term as head the CFPB, but as a conscientious family man, he only works in Washington, he lives in Ohio, where he spends his weekends. One bone of contention for Senate Republican is that they want to replace Mr. Cordray with a five-person commission and reform the CFPB, an agency business backers didn't want in the first place, if they can't repeal it outright, which is now impossible with Democrats in control of the Senate and the White House.
In Washington at the same time, Bill Bartmann, CEO of CFS II and an advocate for consumers and a best-selling author, is all-in with Richard Cordray for several reasons. Among them is Cordray's demonstration that he can run the CFPB in an open and honest manner while simultaneously showing he is a pragmatic and talented leader. Bartmann says Mr. Cordray has earned a reputation for thoughtfulness and fair play, in large part because he has kept politics at bay at the agency housed in the Treasury Department.
In addition to Mr. Cordray's intelligence—he was a 5-time champion on Jeopardy!—and assurances to the business community that the CFPB is not the enemy, Bartmann is sold on Cordray, who he says deserves a permanent appointment as Director of the CFPB as soon as possible, because he's made good on his promise to take on dishonest businesses.
In an exclusive interview with CGE, Bill Bartmann answers questions on Mr. Cordray, the agency he currently heads and the growing topic of financial abuse of seniors.
CGE: As former Massachusetts Congressman Barney Frank says, Congress rarely goes to bat for consumers, preferring instead to champion business. What does the CFPB have to do to cement its existence over the long haul to avoid attempts to either dismantle it or make it less than effective by starving it of funding or leadership?
Bartmann: "It is the nature of our two-party system that Congress will divide into two camps over almost any issue. Some issues spur particular passions that cause one group or another to pull and tug the government to behave in certain ways. The 'pull and tug' tools used are typically control of the budget and the appointment of government officials to run those parts of the government. Rich Cordray is smart, accessible, open-minded, fair, etc. Even those groups opposed to the CFPB agree on those things. As an agency, the CFPB has been low-key and very focused on their primary tasks of getting the mortgage crisis under control. They have done so competently after having listened to all the parties with input. Even in those cases where the CFPB has ordered banks to make changes and issue refunds to consumers, there was almost no pushback from the banks. That tells me that the CFPB Examination staff did their homework competently and professionally and presented a case for change that was essentially irrefutable. The CFPB needs to continue doing exactly what they are doing. Being and acting like professionals. Calm. Clear-headed. Focused. The politics will be whatever the politics will be.
CGE: If Mr. Cordray is either denied reappointment to his leadership by DC lawmakers, or if he chooses to take on Gov. Kasich [which becomes more real if he can't stay in Washington] in 2014, what is your vision of what happens to CFPB, and who would be on his short list of Cordray replacements?
Bartmann: "If the administration decides to withdraw Cordray’s nomination or Cordray decides to go back to Ohio; it is really hard to know who might be nominated for Director. In my opinion, this person needs to have political skills but not be an ideologue and it would be highly desirable for the candidate to have a background in the enforcement side of government. We are fortunate to have a number of really bright Attorneys General who fit this criteria. Some names that occur to me are Roy Cooper (NC), Tom Miller (IA), Kamala Harris (CA), Greg Abbot (TX), Martha Coakley (MA) or Lori Swanson (MN). They are bright and have shown interest in consumer protection.
CGE: Ohio just introduced an Elder Abuse Act. If you're familiar with the bill or the topic, what's your take?
Bartmann: "Well, I’m pretty close to 65 myself. I’ve done some work with the AARP on reforming the debt collection industry. The CFPB has announced some initiatives for the protection of elders. I know that fraud exists because there are people out there who prey on seniors who may be just a little too trusting of strangers. But I think there is a bigger problem. My personal feeling is that debt buyers and their lawyers are the root causes of a lot of the financial stress that seniors are under. These debt buyers and collection lawyers are the real masters of knowing just how to intimidate. Threats to seize homes and social security – all illegal, by the way – are all too commonly used as tools against seniors. Candidly, I think the best answers to preventing financial abuse of seniors is much more systemic – we need to change and enforce the rules to prevent financial abuse of all consumers.
With the approval Tuesday of Mr. Cordray continued leadership of the CFPB by the Senate Banking Committee on a 12-10 party-line vote—all Republican members opposed him—the politics in Ohio, where he served in various elected public offices, take on new mystery about whether he will ultimately decline to take on Gov. Kasich, as Ohio Congressman Tim Ryan announced last week, or whether the field is left to the two possible remaining candidates, Cuyahoga County Executive Director Ed FitzGerald and former Democratic Congressman Betty Sutton.
Bill Bartmann is serious enough about practices in his industry, that SB 1430, currently in the Oklahoma House of Representatives, is also known as The Bartmann Ethical Debt Collection Practices Act. The legislation has already passed the Oklahoma Senate, and it comes following a wave of scandals that illustrate the need for reform in the debt collection and debt buyer industries.
In addition to being a contributor to The Huffington Post, Bartmann is the bestselling author of "Bailout Riches! How Everyday Investors Can Make a Fortune Buying Bad Loans for Pennies on the Dollar" (May 2009, Wiley). The book hit #1 in Amazon in all business and financial categories as well as the best-seller list on Wall Street Journal and USA Today.
His recently published book, "Out of Control: Cases of Debt-Collection Abuse in America and What We Can Do About It," documents clear patterns of abusive tactics used by unethical collectors. His company, Bartmann Enterprises, is on Inc. Magazine's 2010 list of 500 and 5000 fastest-growing, private companies in America. He issued the first "Asset Backed Security" dealing exclusively with "non-performing assets" and went on to issue $3.1 billion in securities - all of which were "A" rated by (then) all four major agencies, according to information provided by Ericho Communications. Additionally, the Harvard Business School performed a case study on his financing techniques.
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