Cordray: Regulators need a certain humility

NEW YORK (MarketWatch) — Richard Cordray is the man who’s going to ruin banking, his critics say. He’s the quintessential Washington job killer. He’s going to make it tougher for people to get credit, buy a home or start a business. 

 

Cordray is the new head of the Consumer Financial Protection Bureau, the agency founded as part of the Dodd-Frank Act of 2010. The CFPB, an advocate for consumers against financial institutions, was the most controversial and contentious part of the law. Its opponents in private industry and politics promised the bureau would fight an uphill battle when it came to new rules, its budget and survival. Read full story on CFPB’s opponents. 

 

After Cordray’s nomination was blocked, President Barack Obama used a recess appointment to put him in place. Opponents were furious. 

 

“We have a rogue director in charge of a runaway budget for an agency whose mission is still unclear,” said Rep. Francisco Canseco, a Republican from Texas, at a hearing in February of the House Financial Services Committee. “This is a recipe for disaster that will only hurt our economy.” 

 

Cordray was in New York on Thursday at a conference run by the University of Rochester's Simon School of Business. Cordray railed against a financial system where “the bad practices drove out the good.” 

 

But, he said, “We believe in the market economy,” adding that over-regulation was a problem. “Government,” he said, "needs a little humility.” 

 

In an interview, I asked him about the controversy surrounding his appointment. Note that what follows is a slightly edited transcript of our discussion. 

 

Writing on the Wall: As a recess appointee ... do you feel as if you’re just 99% head of this bureau? Would you prefer to have the full blessing of a (confirmation) and what your critics would say is the legitimate way?

 

Cordray: I feel 100% that I’m director of the bureau. I don’t think you can feel any other way. The bureau has legal obligations, and as director I have legal obligations. For us to be tentative or hesitant out of some misguided perception would just be wrong.

 

WOTW: Elizabeth Warren (the president’s appointee to launch the bureau in 2010) found out that this is a very political job. There are a lot of things to manage — budget issues — everything you do is going to be under the microscope. How do you deal with it?

 

Cordray: This is not a political job because the people we are working for and serving are the same constituents for every congressman on either side of the aisle, or three sides of the aisle, if you count independents and socialists — maybe more. They hear from, everyday, the same people we hear from. They hear the same problems: people worried about losing their homes, people drowning in credit-card debt, people struggling with student loans.

 

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