Today, President Obama will reportedly nominate Richard Cordray to serve as the first Director of the Consumer Financial Protection Bureau. The position is for a five-year term, and is subject to confirmation by the Senate. Cordray had previously been tapped to lead the Bureau’s Enforcement Division.
Cordray has a long and varied background in Ohio state politics, but is most well known for his two-year tenure as Ohio Attorney General. As Ohio AG, Cordray aggressively pursued legal action and investigations of home lenders accused of “robo-signing” (submitting fraudulent or improper affidavits in home foreclosure proceedings).
The nomination of Cordray as Director is nearly certain to provoke controversy. Many Democrats and consumer advocates lobbied heavily for the President to nominate Professor Elizabeth Warren to lead the Bureau, and will undoubtedly be disappointed that she wasn’t tapped. Conversely, Warren drew heavy criticism from Republicans in Congress, and if nominated, her confirmation faced a near-certain filibuster in the Senate. (Absent a recess appointment, Cordray’s confirmation prospects may be equally uncertain; in May 2011, 44 Republican Senators pledged to block confirmation of any Director unless Congress enacts significant structural changes to the Bureau.)
For the Obama Administration, the timely confirmation of a Director goes well beyond personalities, and has significant substantive implications. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (which established the Bureau), the Bureau will commence its supervision and enforcement activities with respect to large depository institutions on the “designated transfer date” of July 21, 2011, but not with respect to other non-depository institutions until a Director is confirmed.