“We need a marketplace, and a justice system, and other key pieces of our society to operate more effectively and truly reflect the principle that every one of us counts.”
Sounds like a politician, right? Wrong. The remarks were delivered by Richard Cordray, the director of the Consumer Financial Protection Bureau (CFPB). An Obama-appointed bureaucrat, Cordray is reportedly running for governor in Ohio next year, yet remains atop one of Washington’s most overzealous regulatory agencies.
Over Labor Day weekend, Cordray gave a speech to the Cincinnati AFL-CIO—a potentially valuable ally for any Ohio Democrat—touting his bone fides as a financial regulator and champion of the downtrodden. “Through the worst period of the financial crisis, our team safeguarded billions of dollars of our public money without losing a penny,” Cordray bragged. “And after it all blew up, we took the fight to Wall Street, and we managed to recover about $2 billion for Ohio taxpayers, businesses, and retirees.”
Lack of humility aside, the CFPB director appears to be leveraging his current position to score political points.
And he’s backing it up with action. The CFPB is moving quickly to release a rule targeting the payday loan industry, which provides short-term loans to low-income borrowers in need of capital. Once the rule is released, the CFPB will require payday lenders to verify a borrower’s income, major financial obligations and borrowing history before issuing any loan. The agency has already issued a long list of “affordability criteria” to lengthen the payday lending process. The CFPB’s “payday rule” jeopardizes these transactions by imposing unreasonably high standards. It effectively eliminates the reason for choosing payday loans over traditional bank loans in the first place, erecting a barrier between low-income Americans and the credit they desperately need.
Attacking payday lenders is a favorite pastime of the Democratic Party, and politically popular among liberal voters. Left-wing activists have long smeared the payday loan industry with misleading accusations of 400 percent interest rates and “debt traps.” It makes sense for Cordray to curry favor with them before 2018.
But his politicking calls into question the Hatch Act, which prohibits federal employees from engaging in any political activity. If Cordray is using his position at the CFPB to build a platform for a 2018 gubernatorial run, he would be abusing his power and violating of the law. President Trump could then fire Cordray “for cause,” which is long overdue.
This is far from Cordray’s only baggage. Despite claiming to be an “independent” entity, the CFPB is arguably Washington’s most politically biased agency. According to a review of 2016 Federal Election Commission data on 15 U.S. agencies and departments, 100 percent of campaign contributions made by CFPB employees went to Democratic candidates. It ties the CFPB for the country’s most politically biased federal entity—alongside the National Endowment for the Humanities, National Transportation Safety Board and Peace Corps. Even the Obama administration’s Justice Department was more diverse in its workforce’s political preferences.
The CFPB also has a long history of “allegations of discrimination based on an employee’s race, their age, gender (and) sexual orientation.” According to Rep. Sean Duffy (R-WI), “CFPB leadership refuses to take meaningful action to prevent this behavior and protect its employees.” Presumably, liberal voters in Ohio will balk at a track record like that.
Richard Cordray might be looking for greener pastures, but his Washington closet has plenty of skeletons.
Gregory T. Angelo is president of Log Cabin Republicans, the country’s premier organization representing LGBT conservatives and straight allies.