The announcement this afternoon from CFPB implementing a new rule in regard to payday lending reeks of political opportunism from the Bureau’s Director, Richard Cordray.
Cordray has long been speculated to resign from the CFPB in order to run for Governor of Ohio, and his focus on a political run is clearly the motivation for this rule. He knows that time is running out for him to jump into the race, so he pushed this rule through the CFPB so he can now leave the agency and begin his run for office.
Just look at a roundup of the coverage following the rule’s announcement. A great deal of attention was paid, not to the rule’s impact, but to what it means for Cordray’s political deliberations:
Bloomberg: “The completion of the payday lending rules will probably add to speculation that Cordray — an appointee of former President Barack Obama — is wrapping up his top priorities in preparation for running for governor as a Democrat in his home state of Ohio. Washington lobbyists and lawmakers have been predicting for months that he will soon resign.”
Washington Post: “Cordray has declined to comment on rampant speculation that he plans to run for governor of Ohio, where he once served as state attorney general. He has also become a target because he is one of the few remaining financial regulators appointed during the Obama administration still in office. His term doesn’t end until next year.”
Los Angeles Times: “The rules won’t go into effect until mid-2019 and are strongly opposed by most Republicans. The five-year term of Cordray, who was appointed by President Obama, expires in July 2018, and he could leave sooner to run for governor in his home state of Ohio.”
Washington Examiner: “Cordray’s term runs into next summer. Republicans have sought to portray his move to finalize rules now as politically motivated, charging that he is preparing to leave office to run for governor in Ohio as a Democrat. Cordray has not indicated his intentions and ended Thursday’s call with reporters before he could be asked about them.”
Financial Times: “Mr. Cordray, whose term is due to expire next year, has been tipped as a contender to be governor of Ohio, where he was previously the state’s attorney-general and treasurer. Critics have accused him of pressing forward with contentious reforms to serve his political ambitions.”
American Banker: “Even aside from the OCC’s move, the CFPB’s rule has an unclear future. Payday lenders have preemptively suggested the CFPB was rushing the rule so that Cordray can leave to pursue a bid for governor of Ohio. They are likely to make a legal challenge to the rule.”
It’s clear that political motives were behind the implementation of this rule, which is why that Congress needs to seriously review it.