December 7, 2011

RE: Nomination of Richard Cordray to head the CFPB

Dear Senator,

We are writing on behalf of the members of Americans for Financial Reform and the other organizations listed, representing a wide variety of Americans from all walks of life, to urge that you support the nomination of Richard Cordray, the highly-regarded and well-qualified former Ohio Attorney General, to be the first director of the new Consumer Financial Protection Bureau (CFPB).

We are pleased that Attorney General Cordray’s qualifications for the position have been recognized by all; he is an outstanding nominee and we believe his confirmation is necessary to make the agency’s promise that it will “make markets for consumer financial products and services work for Americans” a reality.

On the other hand, we have been extremely troubled by some Senators’ positions that regardless of his qualifications they will oppose General Cordray’s nomination, and even oppose a vote on that nomination, until and unless the legislation establishing the new CFPB is first drastically modified.

Reasonable minds can differ about new agencies, but this is too important a time to allow efforts to manipulate the process for purposes apart from the confirmation to disrupt the Consumer Bureau’s ability to do its job. In fact, in the absence of a director, the CFPB’s powers over banks remain broad, but its authority over their non-bank competitors is limited. This unlevel playing field serves payday lenders, debt collectors, unaccountable credit reporting agencies, mortgage companies and other non-banks well, making it too easy for them to continue to engage in deceptive and abusive practices. And it stands in the way of establishing fair rules of the road that apply to all players in the marketplace, which undermines good practices at community banks and larger depository institutions as well.

The absence of a director also deprives the CFPB of leadership, further limiting its authority. While agencies may sometimes be led by interim directors, it is critical that Congress give a new agency its best chance to succeed, not hamper or hobble it by depriving it of a full leadership team.

Worse, as the recession exacerbated by the unfair bank practices that led to establishment of this landmark agency continues, consumers continue to be harmed by unfair financial practices that the CFPB cannot yet reach. These practices include unfair payday lender terms that trap consumers in a cycle of debt, deceptive private student lending by schools that make promises of jobs that they do not keep but saddle students with mountains of debt anyway, and debt buyers that use robo-calling to collect debts that are no longer owed or were never owed.

We call on all Senators to review the nomination of Richard Corday on the merits and swiftly move it to a vote.

Failing to confirm a nominee so broadly agreed to be qualified and able for the job needlessly puts consumers, and the economy as a whole, at risk.  Leaving the CFPB without a director is unconscionable; it puts consumers who are already suffering through an economic recession caused by a lack of financial regulations in danger of further harm. Leaving the agency without all the tools it needs to not only protect consumers, but to protect companies that compete fairly, leaves both at the mercy of unregulated, predatory firms. And it leaves our whole economy in danger of further problems caused by abusive lending at a particularly vulnerable time. That is the wrong way to go.

We urge you to prioritize effective action to protect consumers and the economy, and to vote to confirm Richard Cordray to direct the CFPB. It is the right thing to do.

Sincerely,

State and Local Organizations: