Ohio Attorney General

The top reasons Wall Street and Republicans are scared of Richard Cordray

The Raw Story

 

 

After months of pushback from Republicans in Congress, President Obama has finally decided to go over their heads and appoint former Ohio Attorney General Richard Cordray head of the Consumer Financial Protection Bureau without them.

So who is he?

We’ve written a lot about him at Business Insider. Partly because, no matter what side of the aisle you’re on, there’s no denying he’s incredibly impressive. Cordray is an undefeated, five-time Jeopardy! champion (he won $45,303), has a masters in economics from Oxford University, and was also editor-in-chief of the University of Chicago Law Review.

After law school he clerked for Supreme Court for a Reagan appointee, and represented the U.S. government before the Supreme Court there three times — once for George H.W. Bush and twice for Bill Clinton. That was all before running for AG of Ohio (a swing state) as a Democrat.

So what’s the problem with Cordray? There are two, one is an old Washington problem, and the other is purely Wall Street’s:

  1. Republicans said they would never support anyone to head the CFPB — Period —that is, unless the White House made serious changes to the agency. (Politico)
  2. He doesn’t just go after Wall Street Institutions. He goes after individual executives as well.

Let’s expand on point 2 with some more examples of how Cordray fought Wall Street as Ohio AG:

When we talked to him about the Merrill/BofA case in 2009, he, of course, explained the why he was suing, but also revealed why he’s such a threat:

My understanding of a bonus is that it’s a special reward for superior performance. There wasn’t any superior performance for special reward; nonetheless, they (BofA and Merrill execs) wanted the bonuses. They ultimately, as best we know, got approval to pay out somewhere between $3 and $4 billion in bonuses, which was a very material element to the value of the merger. That was not disclosed to investors.

…we’ve also pursued some of the top executives — not just the corporations themselves. We do think that they bear their share of the blame — we think that they need to be held accountable as well. We think that that’s a principle that sends a message to other corporate executives on Wall Street that is a further disincentive for this kind of thing in the future.

There’s your new sheriff, Wall Street. As we reported earlier today, it’s likely Republicans will fight Obama’s appointment in Court. In the meantime, Cordray will be able to nice and comfy at the CFPB.

40 States Join to Halt Foreclosures

Wallstreet Journal

Attorneys General Hope Lenders Will Re-Write Loans With Troubled Documents

A coalition of as many as 40 state attorneys general is expected Wednesday to announce an investigation into the mortgage-servicing industry, an effort some of them hope will pressure financial institutions to rewrite large numbers of troubled loans.

The move comes amid recent allegations that mortgage-servicers, which include units of major banks such as Bank of America Corp., submitted fraudulent documents in thousands of foreclosure proceedings nationwide.

The banks say the document problems are technical—largely the result of papers approved by so-called robo-signers with little review—and don’t reflect substantive problems with foreclosures. Still, they have drawn criticism from consumer advocates and state and federal lawmakers.

“I think the mortgage-servicing firms need to understand that they face real exposure now, and they would be well advised to take this very seriously, to clean this up by doing loan workouts to keep people in their homes, which up till now they’ve just paid lip-service to,” said Ohio Attorney General Richard Cordray.      Continue reading…