Tuesday, July 19, 2011 2:03:11 AM
Obama vows fight with pick for consumer agency chief
* Republican calls for more transparency for confirmation
* Obama says "army of lobbyists" fighting financial reform
* Warren may be a candidate for U.S. Senate
By Jeff Mason
Mon Jul 18, 2011 3:37pm EDT
WASHINGTON, July 18 (Reuters) - President Barack Obama warned the financial industry on Monday to stop fighting his administration's reforms to help consumers as he officially announced his pick to head a U.S. financial watchdog agency.
Obama chose a compromise candidate to lead the new Consumer Financial Protection Bureau: former Ohio attorney general Richard Cordray, who is not as recognizable as Wall Street critic Elizabeth Warren but who has his own reputation as a consumer advocate.
Cordray's nomination is expected to face tough resistance in the U.S. Senate, as Senate Republican leader Mitch McConnell said his party will demand "serious reforms" to the new agency before considering any nominee to head it.
Republicans have focused their attacks on the structure of the agency, created by last year's so-called Dodd-Frank financial reform law. They say it has virtually unchecked power and could restrict banks' ability to lend.
Republicans also are likely to target Cordray's record of suing financial institutions including Bank of America (BAC.N) and his strong language condemning bank practices.
Focusing on mortgage lending malpractice, Cordray has referred to the U.S. housing boom that helped cause a deep recession as a "Roman orgy" of debt.
Obama, during a White House ceremony to mark Cordray's nomination on Monday, said that there is "an army of lobbyists and lawyers" trying to water down the provisions of financial reform that his administration passed.
"They've already spent tens of millions of dollars this year to try to weaken the laws that are designed to protect consumers, and they've got allies in Congress who are trying to undo the progress that we've made," Obama said.
"We're not going to let that happen," he added. "I will fight any efforts to repeal or undermine the important changes that we passed."
Warren, who helped set up the agency and would have faced a tough if not impossible confirmation battle to head it, stood at Obama's side along with Cordray during the ceremony. Some politicians in Massachusetts think Democrats may recruit her to run against Republican U.S. Senator Scott Brown in 2012.
'ACCOUNTABILITY AND TRANSPARENCY'
Obama's fellow Democrats control the Senate, but Republicans could use a procedural move to block a confirmation vote.
McConnell said on the Senate floor that Republicans will not back off their demands for structural changes at the agency.
Republicans have demanded that the agency's leadership be changed to a board instead of a single director, the agency's budget be subject to congressional approval, and other financial regulators have a greater say in the agency's oversight of banks.
"We'll insist on serious reforms to bring accountability and transparency to the agency before we consider any nominee to run it," McConnell said.
White House spokesman Jay Carney said the Senate should and would confirm Cordray.
The agency will open its doors on Thursday, the one-year anniversary of Obama's signing of the Dodd-Frank financial oversight law.
The U.S. Chamber of Commerce, a business lobby group, said Cordray would have too much power in his new job.
"The CFPB's structure makes its director one of the most unaccountable officials Washington has ever seen," David Hirschmann, president and CEO of the Chamber's Center for Capital Markets Competitiveness, said in a statement.
"The director is the only Senate-confirmed position at this new federal agency, putting unprecedented powers to regulate a large part of our economy in the hands of a single individual with virtually no checks and balances."
Obama said his reforms would make it easier for consumers to get protection from abusive practices by credit card companies and mortgage lenders.
"For years the job of protecting consumers was divided up in a lot of different agencies," he said.
"We changed that. We cut the bureaucracy and put one consumer watchdog in charge with just one job: looking out for regular people in the financial system."
(Additional reporting by Richard Cowan, Caren Bohan, Patricia Zengerle and Steve Holland; Editing by Will Dunham)
© Copyright 2011 Thomson Reuters
http://www.reuters.com/article/2011/07/18/financial-regulation-cordray-idUSN1E76H1DB20110718 [with comments]
===
Obama Vows Fight Over Efforts to Weaken Dodd-Frank
U.S. President Barack Obama is followed by Elizabeth Warren, the Harvard professor appointed last fall by Obama to set up the Consumer Financial Protection Bureau, left, and former Ohio Attorney General Richard Cordray, as Obama arrives in the Rose Garden to announce the nomination of Cordray to head the new bureau in Washington, D.C., U.S.
Photographer: Joshua Roberts/Bloomberg
By Carter Dougherty - Jul 18, 2011 6:32 PM CT
President Barack Obama said he would push back against Republican attempts to alter the Dodd-Frank regulatory overhaul, in particular the Consumer Financial Protection Bureau.
“I will fight any efforts to repeal or undermine the important changes that we passed,” Obama said today in remarks at the White House after nominating former Ohio Attorney General Richard Cordray to be the agency’s first director. “We are going to stand up this bureau and make sure it is doing the right thing for middle-class families.”
Senate Minority Leader Mitch McConnell of Kentucky and 43 other Republicans announced in May that they wouldn’t vote to confirm anyone as director until changes were made to its structure, a message he repeated today. Under procedural rules in the 100-member Senate, the Republicans could block any vote.
“Senate Republicans still aren’t interested in approving anyone to the position until the president agrees to make this massive new government bureaucracy more accountable and transparent to the American people,” McConnell said in a statement.
The bureau, which was set up by Harvard professor and Obama adviser Elizabeth Warren, is scheduled to start work on July 21. In a posting on the White House blog, Warren criticized “trillion-dollar banks” and Republicans who oppose or want to revamp the agency.
“This agency still has enemies in Washington,” Warren wrote. “And they have a plan.”
Possible Senate Bid
Warren, who didn’t rule out running for the U.S. Senate as a Democrat in November 2012, will return to Harvard later this year.
“That’ll be the time to think about my future,” Warren said today in an interview on Bloomberg Television’s “Bottom Line” program.
Jay Carney, the White House spokesman, said the administration would fight efforts to weaken the agency.
“We believe that Mr. Cordray is the right person for the job and will push that forward,” Carney said today at a news conference.
Consumer advocates including Robert Weissman, president of Public Citizen, back Cordray even as they express disappointment that Warren didn’t get the job.
Obama “succumbed to Wall Street” in bypassing Warren, Weissman said in an interview.
“We are going to strongly support Cordray, and we want the White House to push hard for his confirmation,” Weissman said. “If the Republicans indicate they will block confirmation, we want to see a recess appointment.”
‘Deep Concerns’
David Hirschmann, who heads the Center for Capital Markets Competitiveness at the U.S. Chamber of Commerce, said the business group has “deep concerns” about how Cordray would wield the bureau’s powers.
“We will need to understand where Mr. Cordray stands on these issues,” Hirschmann said in a statement.
Under the Dodd-Frank law enacted last year, the consumer bureau on July 21 will assume authorities under pre-existing laws, including the Truth in Lending Act. It doesn’t inherit other powers such as the ability to supervise non-bank financial firms, including payday lenders and mortgage originators, until a director is in place.
Full Powers
Senator Tim Johnson, a South Dakota Democrat and chairman of the Banking Committee, said yesterday in a statement that he will move the nomination “as quickly as possible” so that the bureau can assume its full powers.
Senator Rob Portman, who was among the Republicans to sign the May letter, didn’t rule out voting to confirm Cordray, a fellow Ohioan.
“Rich Cordray is a dedicated public servant and I will look forward to hearing his views, including on how the CFPB can be made more accountable,” Portman said in a statement yesterday. “As I have said since its inception, I have serious concerns about this new federal bureaucracy.”
Calls to the office of Senator Scott Brown, one of two Republicans who didn’t sign the letter, weren’t returned. Brown, of Massachusetts, would be Warren’s opponent if she decides to run for Senate next year and wins the Democratic nomination.
To contact the reporter on this story: Carter Dougherty in Washington at cdougherty6@bloomberg.net.
To contact the editor responsible for this story: Lawrence Roberts at lroberts13@bloomberg.net.
©2011 BLOOMBERG L.P.
http://www.bloomberg.com/news/2011-07-18/obama-vows-fight-over-efforts-to-weaken-dodd-frank.html
===
Wall Street’s Newest Regulator a Longtime Foe
Richard Cordray, President Obama’s choice to lead the new Consumer Financial Protection Bureau.
Michael Houghton for The New York Times
Richard Cordray, President Obama’s pick to lead [ http://www.nytimes.com/2011/07/18/business/former-ohio-attorney-general-picked-to-lead-consumer-agency.html ] the new Consumer Financial Protection Bureau, is no stranger to Wall Street.
As Ohio’s attorney general during the fallout from the financial crisis, Mr. Cordray undertook a series of prominent lawsuits against big names in the finance world. And in late 2010, after narrowly losing re-election, he came to Washington to spearhead the bureau’s enforcement efforts.
Wall Street was largely silent about the news on Sunday, with few financial trade groups willing to say anything much publicly about the nominee.
“We look forward to a productive opportunity to engage with the new leadership of the C.F.P.B.,” said David H. Stevens, president and chief executive of the Mortgage Bankers Association.
But behind closed doors, some industry officials questioned whether life under Mr. Cordray would be any easier than if Mr. Obama had tapped the consumer advocate Elizabeth Warren to lead the bureau. While Ms. Warren conducted a lengthy charm campaign [ http://dealbook.nytimes.com/2011/03/30/warren-courts-her-top-critics/ ] that led her to meet with bankers from every state and subdue some criticism, Mr. Cordray has been deciding which types of enforcement cases to pursue against the industry.
Here is a look at some of the most prominent cases that made Mr. Cordray, as Ohio’s attorney general, the Midwestern sheriff of Wall Street.
CREDIT RATING AGENCIES
While federal officials issued reports chiding the nation’s top credit rating agencies, Mr. Cordray took them to court. He sued the firms [ http://www.nytimes.com/2009/11/21/business/21ratings.html ], alleging that they not only awarded top grades to troubled mortgage-backed securities but that they also were “intimately involved in structuring” the investments. The products, according to Mr. Cordray, caused retirement funds for police officers and teachers to lose hundreds of millions of dollars.
“The rating agencies’ total disregard for the life’s work of ordinary Ohioans caused the collapse of our housing and credit markets and is at the heart of what’s wrong with Wall Street today,” he said at the time.
Status: Pending
GMAC
Last fall, Mr. Cordray became one of the first attorneys general to take action in the nationwide investigation of wrongful foreclosures. His target [ http://www.cleveland.com/business/index.ssf/2010/10/ohio_sues_gmac_attorney_genera.html ]: GMAC Mortgage, the home lending unit of General Motors, a unit of the renamed Ally Financial.
“It’s now becoming clear that fraud, deception and an utter disregard for accuracy are in part to blame for the national foreclosure disaster,” Mr. Cordray said at the time.
Status: Pending
A.I.G.
One of Mr. Cordray’s biggest wins [ https://www.opers.org/News/2009/12.shtml ] came against the American International Group and its former top executives, whom he accused of accounting fraud. He secured a settlement of about $700 million from the giant insurer and a $115 million deal with its former chief executive, Maurice R. Greenberg.
Status: Settled
BANK OF AMERICA AND MERRILL LYNCH
in 2009, Mr. Cordray led a multistate lawsuit [ http://dealbook.nytimes.com/2009/09/28/ohio-seeks-billions-from-bofa-in-lawsuit/ ] against Bank of America concerning its takeover of Merrill Lynch. Mr. Cordray accused the bank of fraudulently concealing Merrill Lynch’s huge losses around the time of the takeover.
“The amount of shareholder value affected here, negatively, is about as great as has been alleged in any case, ever,” Mr. Cordray said at the time.
Status: Pending
Copyright 2011 The New York Times Company
http://dealbook.nytimes.com/2011/07/18/wall-streets-newest-regulator-a-longtime-foe/ [with comments]
===
Warren on protecting consumers: 'We can do it'
The Rachel Maddow Show [video]
July 18, 2011
Elizabeth Warren, assistant to the President and special advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau, talks with Rachel Maddow about the new nomination of a director of the Consumer Financial Protection Bureau and the Republican opposition that prevented her from being able to take that job.
http://www.msnbc.msn.com/id/26315908/vp/43803229#43803229
===
(linked in) http://investorshub.advfn.com/boards/read_msg.aspx?message_id=65306527 and preceding and following
* Republican calls for more transparency for confirmation
* Obama says "army of lobbyists" fighting financial reform
* Warren may be a candidate for U.S. Senate
By Jeff Mason
Mon Jul 18, 2011 3:37pm EDT
WASHINGTON, July 18 (Reuters) - President Barack Obama warned the financial industry on Monday to stop fighting his administration's reforms to help consumers as he officially announced his pick to head a U.S. financial watchdog agency.
Obama chose a compromise candidate to lead the new Consumer Financial Protection Bureau: former Ohio attorney general Richard Cordray, who is not as recognizable as Wall Street critic Elizabeth Warren but who has his own reputation as a consumer advocate.
Cordray's nomination is expected to face tough resistance in the U.S. Senate, as Senate Republican leader Mitch McConnell said his party will demand "serious reforms" to the new agency before considering any nominee to head it.
Republicans have focused their attacks on the structure of the agency, created by last year's so-called Dodd-Frank financial reform law. They say it has virtually unchecked power and could restrict banks' ability to lend.
Republicans also are likely to target Cordray's record of suing financial institutions including Bank of America (BAC.N) and his strong language condemning bank practices.
Focusing on mortgage lending malpractice, Cordray has referred to the U.S. housing boom that helped cause a deep recession as a "Roman orgy" of debt.
Obama, during a White House ceremony to mark Cordray's nomination on Monday, said that there is "an army of lobbyists and lawyers" trying to water down the provisions of financial reform that his administration passed.
"They've already spent tens of millions of dollars this year to try to weaken the laws that are designed to protect consumers, and they've got allies in Congress who are trying to undo the progress that we've made," Obama said.
"We're not going to let that happen," he added. "I will fight any efforts to repeal or undermine the important changes that we passed."
Warren, who helped set up the agency and would have faced a tough if not impossible confirmation battle to head it, stood at Obama's side along with Cordray during the ceremony. Some politicians in Massachusetts think Democrats may recruit her to run against Republican U.S. Senator Scott Brown in 2012.
'ACCOUNTABILITY AND TRANSPARENCY'
Obama's fellow Democrats control the Senate, but Republicans could use a procedural move to block a confirmation vote.
McConnell said on the Senate floor that Republicans will not back off their demands for structural changes at the agency.
Republicans have demanded that the agency's leadership be changed to a board instead of a single director, the agency's budget be subject to congressional approval, and other financial regulators have a greater say in the agency's oversight of banks.
"We'll insist on serious reforms to bring accountability and transparency to the agency before we consider any nominee to run it," McConnell said.
White House spokesman Jay Carney said the Senate should and would confirm Cordray.
The agency will open its doors on Thursday, the one-year anniversary of Obama's signing of the Dodd-Frank financial oversight law.
The U.S. Chamber of Commerce, a business lobby group, said Cordray would have too much power in his new job.
"The CFPB's structure makes its director one of the most unaccountable officials Washington has ever seen," David Hirschmann, president and CEO of the Chamber's Center for Capital Markets Competitiveness, said in a statement.
"The director is the only Senate-confirmed position at this new federal agency, putting unprecedented powers to regulate a large part of our economy in the hands of a single individual with virtually no checks and balances."
Obama said his reforms would make it easier for consumers to get protection from abusive practices by credit card companies and mortgage lenders.
"For years the job of protecting consumers was divided up in a lot of different agencies," he said.
"We changed that. We cut the bureaucracy and put one consumer watchdog in charge with just one job: looking out for regular people in the financial system."
(Additional reporting by Richard Cowan, Caren Bohan, Patricia Zengerle and Steve Holland; Editing by Will Dunham)
© Copyright 2011 Thomson Reuters
http://www.reuters.com/article/2011/07/18/financial-regulation-cordray-idUSN1E76H1DB20110718 [with comments]
===
Obama Vows Fight Over Efforts to Weaken Dodd-Frank
U.S. President Barack Obama is followed by Elizabeth Warren, the Harvard professor appointed last fall by Obama to set up the Consumer Financial Protection Bureau, left, and former Ohio Attorney General Richard Cordray, as Obama arrives in the Rose Garden to announce the nomination of Cordray to head the new bureau in Washington, D.C., U.S.
Photographer: Joshua Roberts/Bloomberg
By Carter Dougherty - Jul 18, 2011 6:32 PM CT
President Barack Obama said he would push back against Republican attempts to alter the Dodd-Frank regulatory overhaul, in particular the Consumer Financial Protection Bureau.
“I will fight any efforts to repeal or undermine the important changes that we passed,” Obama said today in remarks at the White House after nominating former Ohio Attorney General Richard Cordray to be the agency’s first director. “We are going to stand up this bureau and make sure it is doing the right thing for middle-class families.”
Senate Minority Leader Mitch McConnell of Kentucky and 43 other Republicans announced in May that they wouldn’t vote to confirm anyone as director until changes were made to its structure, a message he repeated today. Under procedural rules in the 100-member Senate, the Republicans could block any vote.
“Senate Republicans still aren’t interested in approving anyone to the position until the president agrees to make this massive new government bureaucracy more accountable and transparent to the American people,” McConnell said in a statement.
The bureau, which was set up by Harvard professor and Obama adviser Elizabeth Warren, is scheduled to start work on July 21. In a posting on the White House blog, Warren criticized “trillion-dollar banks” and Republicans who oppose or want to revamp the agency.
“This agency still has enemies in Washington,” Warren wrote. “And they have a plan.”
Possible Senate Bid
Warren, who didn’t rule out running for the U.S. Senate as a Democrat in November 2012, will return to Harvard later this year.
“That’ll be the time to think about my future,” Warren said today in an interview on Bloomberg Television’s “Bottom Line” program.
Jay Carney, the White House spokesman, said the administration would fight efforts to weaken the agency.
“We believe that Mr. Cordray is the right person for the job and will push that forward,” Carney said today at a news conference.
Consumer advocates including Robert Weissman, president of Public Citizen, back Cordray even as they express disappointment that Warren didn’t get the job.
Obama “succumbed to Wall Street” in bypassing Warren, Weissman said in an interview.
“We are going to strongly support Cordray, and we want the White House to push hard for his confirmation,” Weissman said. “If the Republicans indicate they will block confirmation, we want to see a recess appointment.”
‘Deep Concerns’
David Hirschmann, who heads the Center for Capital Markets Competitiveness at the U.S. Chamber of Commerce, said the business group has “deep concerns” about how Cordray would wield the bureau’s powers.
“We will need to understand where Mr. Cordray stands on these issues,” Hirschmann said in a statement.
Under the Dodd-Frank law enacted last year, the consumer bureau on July 21 will assume authorities under pre-existing laws, including the Truth in Lending Act. It doesn’t inherit other powers such as the ability to supervise non-bank financial firms, including payday lenders and mortgage originators, until a director is in place.
Full Powers
Senator Tim Johnson, a South Dakota Democrat and chairman of the Banking Committee, said yesterday in a statement that he will move the nomination “as quickly as possible” so that the bureau can assume its full powers.
Senator Rob Portman, who was among the Republicans to sign the May letter, didn’t rule out voting to confirm Cordray, a fellow Ohioan.
“Rich Cordray is a dedicated public servant and I will look forward to hearing his views, including on how the CFPB can be made more accountable,” Portman said in a statement yesterday. “As I have said since its inception, I have serious concerns about this new federal bureaucracy.”
Calls to the office of Senator Scott Brown, one of two Republicans who didn’t sign the letter, weren’t returned. Brown, of Massachusetts, would be Warren’s opponent if she decides to run for Senate next year and wins the Democratic nomination.
To contact the reporter on this story: Carter Dougherty in Washington at cdougherty6@bloomberg.net.
To contact the editor responsible for this story: Lawrence Roberts at lroberts13@bloomberg.net.
©2011 BLOOMBERG L.P.
http://www.bloomberg.com/news/2011-07-18/obama-vows-fight-over-efforts-to-weaken-dodd-frank.html
===
Wall Street’s Newest Regulator a Longtime Foe
Richard Cordray, President Obama’s choice to lead the new Consumer Financial Protection Bureau.
Michael Houghton for The New York Times
Richard Cordray, President Obama’s pick to lead [ http://www.nytimes.com/2011/07/18/business/former-ohio-attorney-general-picked-to-lead-consumer-agency.html ] the new Consumer Financial Protection Bureau, is no stranger to Wall Street.
As Ohio’s attorney general during the fallout from the financial crisis, Mr. Cordray undertook a series of prominent lawsuits against big names in the finance world. And in late 2010, after narrowly losing re-election, he came to Washington to spearhead the bureau’s enforcement efforts.
Wall Street was largely silent about the news on Sunday, with few financial trade groups willing to say anything much publicly about the nominee.
“We look forward to a productive opportunity to engage with the new leadership of the C.F.P.B.,” said David H. Stevens, president and chief executive of the Mortgage Bankers Association.
But behind closed doors, some industry officials questioned whether life under Mr. Cordray would be any easier than if Mr. Obama had tapped the consumer advocate Elizabeth Warren to lead the bureau. While Ms. Warren conducted a lengthy charm campaign [ http://dealbook.nytimes.com/2011/03/30/warren-courts-her-top-critics/ ] that led her to meet with bankers from every state and subdue some criticism, Mr. Cordray has been deciding which types of enforcement cases to pursue against the industry.
Here is a look at some of the most prominent cases that made Mr. Cordray, as Ohio’s attorney general, the Midwestern sheriff of Wall Street.
CREDIT RATING AGENCIES
While federal officials issued reports chiding the nation’s top credit rating agencies, Mr. Cordray took them to court. He sued the firms [ http://www.nytimes.com/2009/11/21/business/21ratings.html ], alleging that they not only awarded top grades to troubled mortgage-backed securities but that they also were “intimately involved in structuring” the investments. The products, according to Mr. Cordray, caused retirement funds for police officers and teachers to lose hundreds of millions of dollars.
“The rating agencies’ total disregard for the life’s work of ordinary Ohioans caused the collapse of our housing and credit markets and is at the heart of what’s wrong with Wall Street today,” he said at the time.
Status: Pending
GMAC
Last fall, Mr. Cordray became one of the first attorneys general to take action in the nationwide investigation of wrongful foreclosures. His target [ http://www.cleveland.com/business/index.ssf/2010/10/ohio_sues_gmac_attorney_genera.html ]: GMAC Mortgage, the home lending unit of General Motors, a unit of the renamed Ally Financial.
“It’s now becoming clear that fraud, deception and an utter disregard for accuracy are in part to blame for the national foreclosure disaster,” Mr. Cordray said at the time.
Status: Pending
A.I.G.
One of Mr. Cordray’s biggest wins [ https://www.opers.org/News/2009/12.shtml ] came against the American International Group and its former top executives, whom he accused of accounting fraud. He secured a settlement of about $700 million from the giant insurer and a $115 million deal with its former chief executive, Maurice R. Greenberg.
Status: Settled
BANK OF AMERICA AND MERRILL LYNCH
in 2009, Mr. Cordray led a multistate lawsuit [ http://dealbook.nytimes.com/2009/09/28/ohio-seeks-billions-from-bofa-in-lawsuit/ ] against Bank of America concerning its takeover of Merrill Lynch. Mr. Cordray accused the bank of fraudulently concealing Merrill Lynch’s huge losses around the time of the takeover.
“The amount of shareholder value affected here, negatively, is about as great as has been alleged in any case, ever,” Mr. Cordray said at the time.
Status: Pending
Copyright 2011 The New York Times Company
http://dealbook.nytimes.com/2011/07/18/wall-streets-newest-regulator-a-longtime-foe/ [with comments]
===
Warren on protecting consumers: 'We can do it'
The Rachel Maddow Show [video]
July 18, 2011
Elizabeth Warren, assistant to the President and special advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau, talks with Rachel Maddow about the new nomination of a director of the Consumer Financial Protection Bureau and the Republican opposition that prevented her from being able to take that job.
http://www.msnbc.msn.com/id/26315908/vp/43803229#43803229
===
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