If Richard Cordray runs for governor of Ohio, he would be the only Democratic candidate with a national fundraising base, the potential to send the progressive grassroots into hyperdrive and the only Democratic candidate that has already twice won statewide races.
Still, there is plenty of reason to suspect the director of the Consumer Financial Protection Bureau might avoid the risk of making his time as the agency’s first and only leader a central issue in 2018. The hints he’s dropping about running could even be a ploy to stay in his current job longer.
He has been a lightning rod for controversy since President Barack Obama illegally recess appointed him to the position (at a time the Senate was not technically in recess). The Senate eventually confirmed him in 2013, making his position legitimate. But, he’s had a rocky ride and in September, the House Financial Services Committee issued a second scathing report on Cordray’s lack of transparency and the agency’s lousy handling of the Wells Fargo fraud case.
Congressional Republicans want to reform the agency, to make it more accountable and less all-powerful, somewhat like the Securities and Exchange Commission. Democrats in Congress want to keep the bureau—the brainchild of Elizabeth Warren—as powerful and autonomous as possible.
The Ohio governor’s race is already likely to have national attention because of the state’s strategic importance in presidential races. If Cordray jumps in, the contest could be a national proxy war between the right—uniting the Chamber of Commerce and tea party wings in mutual suspicion of unaccountable regulators—and the left, chiefly supporters of Sens. Warren and Bernie Sanders, but also those Democrats who see it as honoring Obama’s legacy.
Cordray couldn’t continue running the agency while running for governor. So, his exit would be key. It would really charge up the “resistance” and media sympathy if Trump fires him. In September, CBS News did a fawning piece saying, “Richard Cordray may be the best friend the consumer has ever had.” As fawning as it was to Cordray, it was equally sneering toward legislation promoted by House Financial Services Chairman Jeb Hensarling to rein in the agency.
The CFPB is working on a payday lending regulation, which Ohio’s senior senator, Sherrod Brown is promoting. During a July press conference Brown reportedly said what sounded like a good campaign slogan: “Wall Street banks, car title lenders, big corporations have armies of expensive lobbyists. We have Rich Cordray.”
Cordray, elected as state treasurer in 2006 and in a special election for state attorney general in 2008, has been traveling around the Buckeye State, speaking at forums that have little to do with being a financial watchdog, including the AFL-CIO’s Labor Day picnic in Cincinnati, a very political event. The conservative group, America Rising Squared even filed a Hatch Act complaint against him for campaigning for office on government time.
On top of that, from reading Ohio news accounts, it almost seems like he never misses the opportunity to be in the public just to tell reporters no comment. The press typically interprets that as a yes. Politico reported in July that Cordray’s friends are saying he will enter the race.
All that said, he doesn’t seem eager to step aside as CFPB director yet.
The question going into the possible campaign is whether the CFPB would be a boon or a liability. The CFBP’s many shortcomings are difficult to sum up in a soundbite. While the populist red meat behind it—i.e. the Brown quote—sound great.
Ohio, once the most coveted of swing states, is a state that President Donald Trump won by eight points—decisive by recent standards. Maybe that marks a realignment for the state or it could just be that Trump was a different kind of Republican. Populism sells in Ohio.
Somewhat similar to Trump, Cordray has cultivated an image of fighting for the little guy against the powerful interests. This economic populism—us vs. them—could be a natural fit for what the Democratic party is looking for in 2018. Cordray might be resistance-lite, someone establishment Democrats won’t have nightmares about, but also someone that could tap into the Sanders, Warren energy.
“There are worse backgrounds than saying you were fighting for consumers,” said Nathaniel Swigger, a political science professor at Ohio State University. “It’s obviously not a popular agency with Republicans, but it would be the type of profile he needs to easily get the support of Elizabeth Warren-types, with the national profile, support and access to money. He would have a head start over other Democratic candidates.”
Democrats don’t have a particularly strong bench vying to replace the term-limited Republican Gov. John Kasich. So far, Dayton Mayor Nan Whaley, state Sen. Joseph Schiavoni, former U.S. Rep. Betty Sutton and former state Rep. Connie Pillich are running. Another rumor is talk show host Jerry Springer, a former Cincinnati mayor. By contrast, the Republican bench is fully loaded, with Lt. Gov. Mary Taylor, Attorney General Mike DeWine (who beat incumbent Attorney General Cordray in 2010), U.S. Rep. Jim Renacci and Secretary of State Jon Husted.
That’s not to say Cordray is the state party’s only hope. Should the political winds turn sharply against Trump, any of these second-tier Democrats could potentially defeat a top-tier Republican in what is still a battleground state. But right now, political winds don’t look great for Democrats in Ohio.
“Ohio’s long term demographics are moving to the Republicans,” Swigger said. “It’s older, whiter and not a lot of migration into the state.”
There’s a good chance Cordray knows this too and won’t bother. So why act like he’s running?
“If Rich decided not to run for governor, he wouldn’t announce it for as long as possible,” said Ronald L. Rubin, a former CFPB enforcement attorney and a former chief advisor on regulatory policy at the House Financial Services Committee.
Cordray’s five-year term ends on July 2018. Whatever decision he makes, he won’t likely be in office that long. First, if he runs, he’d have to begin campaigning by at least early next year. Second, if it becomes clear he won’t run, Trump will likely say “you’re fired.”
The Dodd-Frank Act created the agency with little accountability. It is financed through the Federal Reserve, so it isn’t subject to congressional appropriation. Also, the president can’t fire the CFPB director at will, though he can fire him for cause.
Hensarling and other Republicans in Congress contend there is plenty of cause, considering the botched handling of the Wells Fargo case. The Justice Department argued in a brief that the president should have the authority to fire the director at will.
“The administration’s main reason for letting him continue as CFPB director is that firing him might make him a martyr and help his campaign,” Rubin continued. “Without that risk he’d be unemployed pretty quickly.”
On Sept. 19, the House Financial Services Committee released its second interim report into the CFPB’s investigation of the Wells Fargo case. While the agency has stonewalled congressional subpoenas, the committee managed to obtain a memorandum “presented and approved by Director Cordray.” The memo estimates the Wells Fargo could have been fined $10 billion. Cordray approved a settlement for $100 million. Further, Cordray and other CFPB officials deliberately withheld the memorandum and other documents from Congress, according to the report. Doing a bad job of oversight is one thing. The report also raises questions about the accuracy of Cordray’s testimony in April to the House committee, as well as his September 2016 testimony to the Senate Banking Committee.
One reason the agency wasn’t doing its job is perhaps because of its futile pursuit of car dealers. An amendment adopted by the Dodd-Frank law prohibited the CFPB from regulating and suing car dealers.
Regardless, such controversies have gained only paltry media coverage, in no small part because much of the media supports the mission of the agency. It’s an agency that’s difficult to make normal people care about. However, the charge of misleading Congress would be tough to fend off on the campaign trail. Also, letting Wells Fargo off with a slap on the wrist undermines his populist bona fides.
A Cordray campaign would intensify the scrutiny of not only him but of the agency. So, while Ohio Democrats might be looking for a big name to lead them in 2018, it’s a safe bet his CFPB colleagues are far less enthusiastic about the prospect.
Fred Lucas is the White House correspondent for The Daily Signal and author of “Tainted by Suspicion: The Secret Deals and Electoral Chaos of Disputed Presidential Elections” (Stairway Press, 2016)
