Consumer chief Cordray dialing up bank CEOs

WASHINGTON Thu Jan 12, 2012 5:41pm EST

Related Topics

WASHINGTON (Reuters) - New consumer financial chief Richard Cordray has been calling the heads of some of the top U.S. banks in an effort to build support for his agency, which is viewed skeptically by the financial industry.

In a controversial decision, President Barack Obama installed Cordray as director of the Consumer Financial Protection Bureau on January 4 to get around Senate Republicans' efforts to block his nomination.

Since that time, an agency spokeswoman said Cordray has reached out to about 100 people at banks, trade associations and consumer groups to make introductions and get feedback.

Among those at the top of the banking food chain he has chatted up are Bank of America (BAC.N) CEO Brian Moynihan, Citigroup (C.N) CEO Vikram Pandit, JPMorgan Chase (JPM.N) chief Jamie Dimon, US Bancorp (USB.N) CEO Richard Davis and PNC Financial Services Group's (PNC.N) James Rohr.

Cordray has also spoken with leaders of consumer groups such as the Consumer Federation of America and Public Citizen and trade groups like the American Bankers Association and the Consumer Bankers Association.

The bureau was created by the 2010 Dodd-Frank financial oversight law to police financial products like mortgages and credit cards.

Consumer groups have heralded its creation while the business community has warned an overzealous regulator could hurt the economy by making it harder to get loans.

Through his outreach and public statements Cordray has been eager to show that he is not a wild-eyed activist but a level-headed regulator who will seek feedback from all sides.

Cordray, a former Ohio attorney general, told reporters on Thursday that he has belonged to the Chamber of Commerce in his hometown of Grove City, Ohio for 20 years.

He said his pitch to the business community is that his goal is to go after those breaking the law or abusing consumers and that will help the majority of lenders who are on the up and up.

"They should embrace the bureau because not only are we going to protect consumers but we are going to support the honest and responsible businesses," he said.

Cordray's elevation to director has kicked up a political sandstorm because it was done through a recess appointment rather than by a Senate vote.

Republicans were blocking a vote on his nomination because of concerns about the bureau's power and they argue Obama may have broken the law by making the appointment when the Senate was technically in session.

The administration disagrees and said the president's decision is on firm legal ground.

Cordray is scheduled to appear at a January 24 House of Representatives hearing to discuss his agency's work.

POSSIBLE LAWSUIT

The bureau and the Obama administration continue to face questions over whether the appointment will be successfully challenged in court, which could jeopardize rules and any enforcement actions taken while Cordray was in charge.

The U.S. Chamber of Commerce held its 2012 kickoff event on Thursday where its president, Thomas Donohue, said the organization was keeping the option of a lawsuit open but tempered any expectation it would come soon.

"Let me put that into context - we take decisions on law suits in a big damn hurry," he said. "On this one we are working our way through it."

(Reporting By Dave Clarke and Alexandra Alper; Editing by Tim Dobbyn)

FILED UNDER: