Obama picks former Ohio AG for key post

Jessica M. Karmasek Jul. 18, 2011, 9:25am

WASHINGTON (Legal Newsline) - President Barack Obama has reportedly chosen former Ohio Attorney General Richard Cordray as director of the new Consumer Financial Protection Bureau.

According to Reuters, a formal announcement is planned for Monday afternoon at the White House. The bureau, which is opening its doors this week, was created by the Dodd-Frank regulatory overhaul and is tasked with regulating consumer financial products.

In picking Cordray, Obama left behind Elizabeth Warren, the special White House adviser who helped conceive and put together the new agency.

Warren issued a statement on Sunday in response to Obama's pick:

"Last year, when President Obama and Secretary Geithner asked me to help them stand up the consumer bureau, I enthusiastically accepted the position and got to work because I believe firmly that the CFPB can make the consumer finance markets work better for American families -- eliminating fine print, making costs, benefits and risk clearer, and holding those who break the law accountable. In the time since, we have been hard at work building an agency to do just that," she said.

Cordray, she said, has a "proven track record of fighting for family."

"He was one of the first senior executives I recruited for the agency, and his hard work and deep commitment make it clear that he can make many important contributions in leading this agency. He will make a stellar director. I am very pleased for Rich and very pleased for the CFPB."

In December, Warren selected Cordray, a Democrat, to head the CFPB's enforcement branch.

Cordray, for his part, has participated in the multi-state investigation of mortgage servicers for allegedly falsifying documents.

The nationwide scandal has called into question the accuracy and legitimacy of documents that lenders relied on to evict people from their homes. Employees of a handful of lenders already have acknowledged in depositions that they signed off on foreclosure documents without reading them.

State attorneys general, the U.S. Justice Department, Treasury Department and the bureau now are in the midst of negotiating a settlement with the country's five largest mortgage servicers, including Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co., and Ally Financial Inc.

Last fall, Cordray lost to former Lt. Gov. and U.S. Sen. Mike DeWine, a Republican.

Cordray was elected to the attorney general post in November 2008 to serve the remainder of the term held by the previous attorney general, Marc Dann. Dann had resigned in May 2008 amid a sex scandal.

Prior to being attorney general, Cordray served as the Ohio State Treasurer and as treasurer of Franklin County, Ohio. He also served as a member of the Ohio House of Representatives and as the state's first solicitor.

Cordray's name had been tossed around as a possible Ohio Supreme Court justice following his failed re-election bid.

His nomination requires Senate confirmation.

From Legal Newsline: Reach Jessica Karmasek by e-mail at jessica@legalnewsline.com.

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