Sen. Franken Speaks on Senate Floor in Support of Richard Cordray to Head Consumer Financial Protection Bureau
SEN. AL FRANKEN
IN THE UNITED STATES SENATE
December 7, 2011
STATEMENT ON THE NOMINATION OF RICHARD CORDRAY TO LEAD THE CONSUMER FINANCIAL PROTECTION BUREAU
Senator Al Franken
M. President, I rise today to strongly support Richard Cordray, the President’s nominee to be Director of the Consumer Financial Protection Bureau.
Three years ago, our economy was tumbling into the deepest recession of our generation. In the fall of 2008, the stock market was plummeting, unemployment was skyrocketing, and there were daily reports of yet another financial institution crumbling. Our economy was in a chaotic tailspin. That was only three years ago.
Today, we’re in a slow and tenuous recovery. Unemployment is still way too high. Millions of Americans are out of work, and have been for some time. Long-term unemployment is staggeringly high. Retirement accounts are still reeling. Yet in the halls of Congress we are dominated by discussions of our nation’s debt and deficit. In fact, we’re doing little else.
Now, these discussions are necessary. We need to tackle our deficits and our long-term debt. But as we do so, we shouldn’t lose sight of how we got here. The lessons we learned in the aftermath of the 2008 crash shouldn’t be so quickly forgotten.
The crash of 2008 was driven in no small part by unfair practices in the mortgage industry, which led to many consumers becoming trapped in loans they didn’t understand and couldn’t afford. It should come as no surprise that this was the result of increasing deregulation of the banking industry.
So in response, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. Dodd-Frank, which was passed into law last year, sought to rein in abusive practices, protect American consumers, and prevent future meltdowns. One of the bill’s centerpieces was the establishment of the Consumer Financial Protection Bureau. The CFPB, is the first federal financial regulator devoted solely to looking out for the best interests of American consumers—and to do so before a crash and before any taxpayer-funded bailouts are necessary.
The CFPB’s mission is a common sense one. The CFPB is tasked with ensuring that consumer financial markets are fair and competitive; that consumers have clear information about financial products; that financial practices are not unfair, deceptive, or abusive; and that consumer financial regulations are improved and streamlined. The CFPB seeks to empower American consumers to make the best financial decisions for their families—and that can only help out our nation as a whole. And several months ago, on the one year anniversary of the enactment of Dodd-Frank, there was good news and bad news. The good news was that the CFPB officially opened its doors. It’s already hired staff and begun some of its work.
In fact, awhile back I met with Mrs. Holly Petreaus, who is heading up the Office for Service Member Affairs at CFPB. She wanted to discuss a few problems that disproportionately harm members of our armed services. We talked about ways to educate service members about the potential downfalls of certain types of loans. This is exactly the type of work that I’m so happy that the CFPB has begun. And that would be the good news.
The bad news is—the CFPB still does not have a Director. Under Dodd-Frank, the CFPB cannot fully do its job until a Director is in place. It can do some things, but it will be limited until the Senate confirms a nominee. President Obama has nominated Richard Cordray. Rich is an impressive figure, and he has my full support.
Rich Corday has been on the front lines, protecting homeowners from risky—and sometimes illegal—practices of mortgage servicers. In 2009, he was the first state attorney general to take on a mortgage servicer for violating consumer laws.
And last year, he continued his strong record of standing up for homeowners when he represented the people of Ohio against GMAC Mortgage for signing thousands and thousands of affidavits allowing foreclosures to proceed, despite the fact that nobody at the company had any knowledge of these cases. So I want Rich Cordray at CFPB putting his previous expertise to work. During his tenure as Attorney General, he also took on the credit rating agencies on behalf of Ohio’s pensioners. Because of the rating agencies’ reckless and profit-driven behavior, hardworking Ohioans lost over $450 million from their pensions. Rich Cordray is exactly the kind of strong consumer advocate that the CFPB needs.
Further compounding the bad news is that most of my colleagues on the other side of the aisle have vowed to oppose any nominee until the CFPB is substantially altered. Literally any nominee. They claim that changes to the CFPB need to be made before they’ll even look at a nominee.
The proposed changes supposedly rectify the “unprecedented authority” granted to the CFPB and impose “real checks” on that authority. In fact, the CFPB is subject to unprecedented limitations: it is the only banking regulator whose rules are subject to veto power by a group of other regulators, the only banking regulator subject to Small Business Regulatory Enforcement Fairness Act panels, and the only banking regulator with a budgetary cap.
We already had this debate. During consideration of Dodd-Frank last year, there were attempts to weaken the CFPB, and those attempts were defeated. Now, the people who lost that debate are taking a second crack at consumers and trying to bring down this bureau. Only this time, instead of debating on the Senate floor, they’re hijacking the Advice and Consent function of the Senate. Is that really a precedent that we want to set? I don’t believe that’s what the Founders of this great nation conceived when they gave this function to the Senate. I urge my colleagues instead to consider this nominee on his merits. Rich Cordray has demonstrated that he is looking out for middle class families. He’s looking out for homeowners who have been scammed by mortgage servicers. He’s looking out for pensioners who’ve lost their pensions at the hands of Wall Street recklessness. He has been endorsed by former Republican U.S. Senator and current Ohio Attorney General Mike DeWine. He’s exactly the type of person we need at the helm of this critical bureau. And this bureau can’t do its job until he’s confirmed.
I hope that my colleagues will reconsider their position and instead do what’s right for American consumers. I hope my colleagues will join with me in supporting Rich Cordray to be the first Director of the Consumer Financial Protection Bureau.
Thank you, and I yield the floor.