Mortgage Daily

Published On: October 15, 2018

CLEVELAND — You can call Ohio Democratic gubernatorial candidate Richard Cordray a nerd (he’s a five-time Jeopardy! champion who likes to tweet state trivia).

You can even call him boring (asked by the Columbus Dispatch to name his favorite beer, wine or liquor he answered, “grapefruit juice”).

Just don’t call him a bureaucrat.

For five years, Cordray, 59, headed the Consumer Financial Protection Bureau, the federal agency created after the 2008 financial crisis to protect Americans in the marketplace for credit cards, mortgages, student loans and other products.

Now, in a closely fought and increasingly nasty race, his experience as the bureau’s first director forms the foundation of his campaign.

In this crucial swing state, Cordray’s race against Republican Mike DeWine, the state’s attorney general, serves as a road test of themes that Democrats would like to drive into the 2020 presidential race.

They hope that sharp criticism of banks and other big corporations along with support for tighter financial regulations and consumer protections will counter President Donald Trump’s appeal to blue-collar, white voters.

So far, Cordray’s Washington experience has delivered high-wattage support from former President Barack Obama, who tapped him to lead the CFPB, and Sen. Elizabeth Warren, (D-Massachusetts), who first hired him for a senior position when she was launching the agency.

What remains unknown is whether that consumer watchdog background can deliver a majority of voters in a state that Trump won handily in 2016.

DeWine has countered Cordray’s consumer appeals with charges of mismanagement, regulatory overreach and bureaucracy run amok at the agency.

So although Cordray proudly touts his CFPB experience in speeches, debates and TV ads, he bristles at the suggestion that he was just another inside-the-Beltway paper-pusher.

“I wasn’t a Washington bureaucrat. I was consumer watchdog, a very different thing for people,” Cordray said after folding his rangy frame — he’s a 6-foot-2-inch former semi-pro basketball player — into a wooden chair in a Starbucks in downtown Cleveland one morning this month.

“They know that some people are very bureaucratic, they’re stagnant, they’re not moving the ball on the status quo,” he continued. “What we were doing was changing a lot of things for a lot of Americans.”

He repeated a line he uses frequently in the campaign: Under his watch, the CFPB provided 30 million Americans a total of about $12 billion in refunds and debt relief from banks, credit card companies and other financial institutions.

The party that wins the race in Ohio will gain an advantage in the 2020 presidential election by being able to tap the incumbent governor’s political apparatus. More important, the next governor will oversee the congressional redistricting that takes place after the 2020 census, potentially helping his party hold existing seats and win new ones through the once-a-decade boundary adjustments.

“It’s part of why Democrats want it so badly,” said Jennifer Duffy, senior editor of the nonpartisan Cook Political Report campaign newsletter. “They think they can pick up House seats there.”

But the race also matters as an indicator of what issues connect with voters.

Trump has hardly been mentioned. DeWine, an establishment Republican, hasn’t embraced him. And Cordray has treaded lightly, knowing Trump won the state 52 percent to 44 percent over Hillary Clinton.

Democrats are optimistic about their prospects in what’s shaping up as a good year for their party nationwide. And the battle has taken on a sharp tone as Cordray and DeWine, 71, a former U.S. senator, battle for a second time for statewide office.

DeWine narrowly unseated Cordray as the state’s attorney general in 2010, and the two clearly don’t like each other.

“They’re almost equals and opposites in Ohio politics,” said David Niven, an associate political science professor at the University of Cincinnati. “As a consequence, the race is close, and it’s gone very, very ugly.”

Cordray’s career wasn’t derailed by that 2010 loss. It was recast, bringing him strong connections to two of the Democratic Party’s leading figures.

Within weeks of his loss, Warren hired him to be the new CFPB’s first enforcement director.

Warren, who conceived of the agency and was preparing its opening as an Obama aide at the time, was the logical choice to be the first director. But Obama viewed her as too controversial to be confirmed by the Senate’s Republican majority, and nominated Cordray for the job.

He held the post from 2012 to 2017 and was an aggressive watchdog. Cordray put in place tough regulations, including on mortgages and payday loans, while launching enforcement actions against Bank of America Corp., Wells Fargo & Co. and other financial firms.

Democrats and consumer advocates praised his performance.

“Rich isn’t flashy. He’s a nerd just like me,” Warren said in an interview. “He’s quiet. He’s unassuming. But under that humble shell, there is a fighter.”

Republicans and industry lobbyists opposed the independent consumer bureau from the start, arguing that it was too powerful and lacked enough congressional oversight. Republican lawmakers pounded Cordray relentlessly at congressional hearings, accusing him of abusing his powers and restricting consumers’ access to credit through overly strict regulations and enforcement.

Cordray stepped down last November; he announced his candidacy 11 days later in a video that focused on his CFPB experience.

He frequently points to his work there as proof that he will fight for average people.

“I have stood up against powerful interests who thought that they could take advantage of people and get away with it,’ Cordray said at a debate with DeWine last month. “As Ohio’s attorney general and America’s consumer watchdog, I didn’t let them get away with it.”

A few days earlier, during an appearance at a Cleveland forum to talk about jobs with students and young workers, Cordray described his tenure at the CFPB as “my most interesting, rewarding and challenging job.”

At least some of the voters in the audience warmed to that.

“It does feel good to know he has experience in consumer protection,” said Jenna Thomas, 19, of Lakewood, Ohio.

Thomas, a sophomore at Cleveland State University, didn’t support Cordray in the Democratic primary, but said the backing of Obama and Warren helped convince her he’s worth her vote.

DeWine has tried to make Cordray’s experience a liability.

“Discrimination. Sexism. Intimidation,” begins a DeWine TV ad. “That’s what went on at Richard Cordray’s government agency.”

The ad refers to allegations, aired at a 2014 congressional hearing, about a culture of racial discrimination and retaliation at the agency. A 2016 Government Accountability Office report found that 25 percent of black, Asian and women reported in a survey that they had experienced discrimination at the agency.

“You had a mess in Washington,” DeWine told Cordray at another debate last Monday.

Cordray said in the interview that DeWine is using “industry lobbyist talking points” designed to attack the consumer agency.

“That all stemmed from a performance review system that was in place before I became director, and I inherited it, and it was causing problems and giving rise to grievances and so we eliminated it, put it aside and developed a new system that worked well,” he said.

Cordray said his time as CFPB director steeled him for political attacks. Regulators aren’t supposed to respond with zingers. But as a politician again, the soft-spoken Cordray has unleashed a series of barbed one-liners that have spiced up what Duffy calls “the battle of the blands.”

“You have been in charge of this opioid crisis for the last eight years,” Cordray told DeWine during their first debate last month, hitting on a key issue in the race. “The fact that we would listen to you now on drug policy would be like asking for navigation advice from the captain of the Titanic.”

Cordray said Ohioans are responding well to the message that he will fight for them.

The financial crisis remains “the defining economic event of our lifetimes, and both the impact of it and the unevenness of the recovery from it have affected a lot of people’s lives,” he said. “They appreciate somebody who tried to do something about it and get people’s money back for them and try to improve the situation so that could not happen again.”

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