Around noon Thursday, Consumer Financial Protection Bureau chief and subject of hot Ohio governor’s race speculation Richard Cordray dropped the Bureau’s much-anticipated short-term lending rule, which critics say could help further his political ambitions in the Buckeye state.
Cordray, a former Ohio Attorney General, is widely considered Democrats’ only real prospective gubernatorial talent. He has thus far hedged from entering the race, but since last weekend, rumors have been swirling in Washington, D.C. that he would do so as soon as this particular rule was issued.
Within hours of the rule dropping, buzz in Washington, D.C. was that Cordray was likely to resign his office as soon as Thursday night, to free himself up for weekend campaigning in his home state.
The rule in question takes aim at short-term loans, including payday and online loans, often used by borrowers who lack access to more traditional lines of credit, such as those available from major banks. That situation can occur where borrowers have poor credit or are racially discriminated against by bigger banks, where they live in remote or rural areas, and where they do not work standard 9-to-5 hours, thus limiting their access to traditional banks. In addition, millennial borrowers have shown interest in the kinds of loans impacted by the rule.
Republican political consultants tracking the Ohio race see the short-term lending rule as a brazen resume-padder designed to motivate Bernie Sanders and Elizabeth Warren-type voters who might otherwise prove unenthusiastic about the more soft-spoken, less-radical-sounding Cordray. Together with a recent CFPB move against arbitration, which benefits trial lawyers, the rule could prove a solid basis for fundraising pleas to the left-wing Democratic base of the Ohio GOP. Critics say it could allow Cordray to position himself as the philosophical as well as actual successor to Elizabeth Warren.
Former Ohio Secretary of State Ken Blackwell criticized Cordray following the rule’s announcement Thursday, hinting at a connection between the timing of the rule drop and the state of play in the Ohio gubernatorial contest. Blackwell was quoted by the Daily Caller News Foundation saying “Cordray’s connections have never been disconnected.”
The short-term lending rule could be subject to a challenge under the Congressional Review Act. Early Thursday afternoon, conservative leaders in Washington, D.C., were already arguing with congressional leadership that the CRA should be used to nix the rule, especially if Cordray does resign from office, run for governor and use his actions as CFPB chief to solicit campaign funds.
Earlier this year, speculation was that President Trump would fire Cordray for cause, focusing on allegations of racial, sexual, ageist and anti-gay discrimination at the CFPB, as well as mismanagement of funds. However, as the President has become more focused on Obamacare repeal and tax reform, and Ohio loyalists urged Trump to let Cordray stay so as not to create a viable Democratic contender for Governor, Cordray’s continued tenure became a given.
Now the question is whether Cordray will fire himself.