Personal Finance

Is Richard Cordray the New Elizabeth Warren?

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After a decade of disappointment, Cordray finally began to gain traction as a politician by lowering his sights. Instead of running for Congress or the Senate, he returned home to Columbus and ran for county treasurer in 2002.

Even that was not a safe move, since Republicans had dominated the county’s politics for decades.

“Those were tough years” for Democrats in Ohio, Haas says. “Rich ran in times when other, more prominent Democrats were hiding. He was willing to stick his neck out.”

Cordray (just barely) won, becoming the first Democrat to hold the job since the 1970s. Considering his future career as a consumer’s advocate, the timing turned out to be auspicious. Like many cities, Columbus was being ravaged by predatory mortgages, in which lenders often convinced people who had owned their homes for decades to take out large home equity loans that were loaded with hidden fees and interest charges.

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With his background in economics and law, Cordray was able to quickly make sense of the complicated loan contracts and see how they were designed to rip off consumers, says Holly Hollingsworth, who later became Cordray’s press secretary.

Meanwhile, his instincts for staying close to the grassroots continued to serve him well. Cordray attended many neighborhood meetings with Mayor Coleman to hear directly from consumers themselves about the problems they faced with their mortgages.

If a homeowner was having trouble with a particularly bad predatory lender, Cordray would make phone calls, knowing that his position as county treasurer gave him access that ordinary citizens didn’t have, says Brown.

“He’d show up to these meetings in his Jeep, without any staff, and just hang out, sometimes for three hours,” Brown says. “He had absolutely no legal responsibility to be there. He just got it.”

In 2006, Cordray ran for state treasurer, and won. Two years later, Cordray won a special election to become Ohio’s attorney general, after the previous AG resigned in a sex scandal.

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Taking office before the financial crisis hit gave Cordray a chance to establish his bona fides as an advocate for consumers. Corday filed lawsuits against small companies, including fake foreclosure rescue scam operations, as well as major financial powerhouses including Bank of America for allegedly misleading investors, and GMAC for filing forged documents in court that may have helped the company foreclose on homeowners illegally.

He also sued the three major credit rating agencies, Fitch, Moody’s and Standard & Poor’s, for overstating the value of mortgage-backed investments, earning more pay for themselves and Wall Street firms by deceiving investors.

“In short, the credit rating agencies sold out and sold us out,” Cordray said at a press conference in 2009.

But unlike some people who held similar positions, including former New York Attorney General Elliot Spitzer, Cordray was never viewed as a lawsuit-happy pit bull. He reached out to Ohio Supreme Court Chief Justice Tom Moyer, a Republican, working together to create a mediation program to help reduce mortgage lawsuit caseloads in county courts, and help some homeowners keep their homes.

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“Rich understands the soft power of an office,” says Chris Glaros, who worked under Cordray as assistant attorney general and is now the chief lawyer for the Children’s Defense Fund. “He’s extremely good at understanding complex problem and finding solutions that are realistic and meaningful, and forging partnerships with people from all different parts of the political spectrum.”

Cordray’s successes at challenging unscrupulous lenders won him nationwide attention. That came in handy in 2010, when he narrowly lost his re-election campaign to Republican Mike DeWine. Within a month, he was tapped to lead the enforcement division at the Consumer Protection Bureau.

When President Obama announced his nominee to lead the new bureau, in July, he made it clear that Cordray’ experience investigating financial firms was his prime qualification.

“Prior to this, as Ohio’s attorney general, Rich helped recover billions of dollars in things like pension funds on behalf of retirees, and stepped up the state’s efforts against unscrupulous lending practices,” Obama said.

It’s rare for any politician to receive such widespread respect, especially one who has been in the public eye for two decades. In reporting this story, Credit.com grew so tired of hearing how brilliant and principled Cordray is that we started to almost beg: Isn’t there something wrong with this guy?

The only complaint we heard: Rich Cordray prefers nerdy shirts.

“Honest to god, the worst thing I can think of is that he loves those professor-looking shirts with the button-down collars,” says Hollingsworth. “I told him they look really bad. He didn’t care.”

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Is Richard Cordray the New Elizabeth Warren? (cont.) »

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