Richard Cordray currently heads the Consumer Financial Protection Bureau (CFPB), doing the job Elizabeth Warren was originally supposed to do in Washington, D.C.
But could he end up being Democrats’ nominee for governor next year? Some political consultants tracking Cordray’s actions think it’s still possible, even though the chances seemed to diminish sharply earlier this year.
At the outset of President Trump’s term, speculation was that Trump would fire Cordray, freeing him up for future job opportunities like running to succeed John Kasich. But then something happened: Trump blinked, Cordray stayed in the job, and the Trump administration seemed to lose interest in all matters financial services-related. Regulatory reform writ large was a priority, but canning Cordray and overhauling Dodd-Frank was not.
Cordray has since continued on his merry way, with President Trump and his administration more concerned about “covfefe” tweets and Morning Joe than financial services policy.
But Cordray has been taking actions that would seriously benefit him if he decided to ditch the CFPB and relaunch his Ohio statewide political career.
Most broadly, Cordray has used the CFPB platform to build an image as a somewhat more moderate, calm, Midwestern Elizabeth Warren: Picking fights with big financial institutions Warren loves to bash. That’s positioned him to have a powerful small-dollar, online, netrootsy fundraising base if he steps up.
But more critically, under Cordray, the CFPB just put on the books an “anti-arbitration rule” that pushes financial services companies away from arbitration. That means more financial services consumer disputes will be handled via the courts. And that means Cordray just handed trial lawyers a massive stimulus in the form of CFPB rule making, while doing nothing useful for consumers.
According to the House Financial Services Committee, whose leadership opposes the rule, “Even the CFPB’s own study shows that consumers who use arbitration actually gain more favorable outcomes than those who hire trial lawyers for class action lawsuits. The average payout for consumers in a class action is $32, while the average trial lawyer receives nearly $1 million. Making consumers pay more for less is the exact opposite of ‘consumer protection.”
Forbes notes that non-CFPB studies regarding arbitration as opposed to class action have shown “the odds of anybody collecting money in a class action are less than 1 in 400, or less than the odds of a straight flush in a 7-card poker hand.”
It’s not news that liberals often pursue policies of little to no actual value to consumers in the name of consumer protection. But it is at least a little newsy that this is all playing out at a time when the Ohio Democratic Party seems to be struggling to get someone with real firepower to run, when Trump-whisperer and former campaign manager Corey Lewandowski has been urging Trump to fire Cordray again, and as a debate continues in court about whether the CFPB is in fact constitutional.
A lot of Democrats would revile Cordray for voluntarily stepping down from CFPB to run for office in Ohio, even if his winning were a dead cert. A lot of Ohio Republicans also do not want Trump to fire Cordray, because they know that then, they probably have a real race on their hands. But Trump famously does not always listen to other members of his party. And maybe, just maybe, ahead of a 2020 Presidential run, people in the Elizabeth Warren/Bernie Sanders faction might like to have the issue of consumer protection as opposed to having a good Democrat holed up in the CFPB, rule making and purporting to do just that.