The Washington Post

Richard Cordray being considered for post of Fed’s top banking regulator

First CFPB director has experience navigating tricky political waters

- BY RACHEL SIEGEL rachel.siegel@washpost.com

The Biden administra­tion is considerin­g Richard Cordray, the first director of the Consumer Financial Protection Bureau, to become the Federal Reserve’s top banking regulator, according to three people familiar with the nomination process.

Cordray currently serves as the chief operating officer of Federal Student Aid, an agency within the Education Department that oversees the federal student loan program.

Cordray also has experience navigating tricky political waters. He was appointed to lead the CFPB by President Barack Obama in the aftermath of the Great Recession to regulate lenders and companies involved in consumer finance. At the time, his nomination was contested for months because of Republican opposition to the structure of the bureau’s leadership.

Reached by phone Tuesday, Cordray declined to comment. Cordray left the CFPB when the Trump administra­tion came into office. He is also a former attorney general of Ohio.

Though much anticipati­on revolved around the renominati­on of Jerome H. Powell as Fed chair, Democrats and left-leaning economists have been particular­ly concerned about President Biden’s choice for the Fed’s top banking cop — formally known as the vice chair for supervisio­n — given the job’s vast authority over the banking sector.

President Donald Trump’s pick for the role, Randal Quarles, was criticized by left-leaning economists and lawmakers for gradually easing restrictio­ns on Wall Street that were put in place after the Great Recession. The job has been vacant since October, with many Fed watchers frustrated that the White House hasn’t moved faster to name a nominee.

Liberals are urging Biden to pick a candidate who will restrength­en banking rules put in place since the financial crisis. They are also pushing Quarles’s replacemen­t to focus on the ways climate change poses risks to financial stability and overall economic activity.

Over the past few months, Sarah Bloom Raskin, a former Fed governor and former deputy secretary of the Treasury Department, has also been mentioned for the job by liberal economists and others close to the Fed. It’s unclear how closely she is being considered by the Biden administra­tion.

People close to Capitol Hill and the White House said Cordray specifical­ly has support from Sen. Elizabeth Warren (DMass.), who has sharply criticized the Fed’s moves to relax Wall Street oversight. Warren is also opposing Powell’s renominati­on as Fed chair, having previously called him “a dangerous man” over his record on banking issues.

Warren’s office declined to comment. A spokeswoma­n for Sen. Sherrod Brown (D- Ohio), who chairs the Senate Banking Committee, also declined to comment.

Biden has a tremendous opportunit­y to shape the central bank. Last week, he reappointe­d Powell and elevated Lael Brainard, the Fed board’s only Democrat, to vice chair. Now attention shifts toward how the administra­tion will fill the central bank’s remaining vacancies.

In addition to vice chair for supervisio­n, there are two empty governor seats. Last week, Biden said additional Fed nomination­s could be expected starting in early December.

The White House’s Fed nomination­s come at a highly consequent­ial time for the central bank, which is grappling with inflation at 30-year highs and looming questions over how monetary policy should respond.

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