Wrapping himself in the mantle of Theodore Roosevelt’s “National Greatness” agenda, President Obama urged the nation to stand strong and unite behind . . . his umpteenth regulatory czar. Nothing symbolizes American strength and vigor more than another unaccountable Washington bureaucrat.
If Richard Cordray, the stalled White House nominee to enforce the Dodd-Frank financial bureaucracy, is not approved, the wheedler-in-chief warned in Osawatomie, Kan.: “Every day we go without a consumer watchdog in place is another day when a student or a senior citizen or member of our Armed Forces could be tricked into a loan they can’t afford — something that happens all the time.”
In Obama’s America, you see, “greatness” springs from vastly expanding government power to shield every last borrower in the country from poor financial behavior.
Senate Republicans have vowed to block Cordray or any other candidate for the job until key reforms are made to the sweeping law and its half-billion-dollar enforcement arm, the Consumer Financial Protection Bureau. The commonsense changes include subjecting the CFPB to the congressional appropriations process instead of the Federal Reserve; restoring independent judicial review; ensuring that it takes into account the impact of new rules on the safety and soundness of financial institutions; and creating a bipartisan oversight board instead of a single director to run the agency.
Obama himself supported such a panel — before he opposed and demagogued it. As it stands, the bureau remains under the Treasury Department. The minute a director is sworn in, the agency will transfer to the Fed for administrative purposes, but will effectively have free rein. The Fed’s authority over it is illusory. And it would be impossible for the Dodd-Frank czar to be removed by a change of administration, because his term is five years and his tenure protected.
While crusading as a consumer watchdog who’ll take on Wall Street, Cordray (whom voters booted from the Ohio attorney general’s office last fall) is tight with securities class-action lawyers. As Daniel Fisher at Forbes magazine reported, Cordray has a record of “taking money from lawyers who profit from private litigation that often follows closely on the heels of government investigations.” In other words: exactly the kind of cozy crony relationships that created our financial crisis in the first place.
As for Cordray’s ability to police shady behavior by others, his own record as Ohio attorney general raises more doubts than it allays. When local papers spotlighted shady campaign account-shifting involving nearly $800,000, even a liberal Ohio Citizen Action leader responded: “I’m sure he’s following the letter of the law. It’s certainly not following the spirit of the law.”