When Representative Luis Gutiérrez, a liberal member of the House Financial Services Committee, heard over the weekend that President Obama had nominated Richard Cordray to head the Consumer Financial Protection Bureau, he wasn’t sure what to think. Not because he was unsure about Cordray’s record—Gutiérrez just didn’t know who he was.
“I am not familiar with Attorney General Richard Cordray, but a quick Google search was very reassuring,” Gutiérrez said in a statement Monday. “He is the type of strong, experienced leader we need to get the agency fully up and running.”
Cordray may have a very low national profile, but in Ohio—where he’s been active in Democratic politics since the early ’90s, and served as state attorney general for two years beginning in 2009—he’s much more of a known commodity.
Since the economic crisis in 2008, Ohio has been plagued with high foreclosure rates. One out of every 608 homes in the state is in foreclosure, and in the Cleveland area, foreclosures have tripled since 1998. The problem was exacerbated by mass “robo-signing” fraud by big banks in the aftermath of the collapse—banks were routinely foreclosing on homes without the proper paperwork or legal documentation.
Cordray quickly stepped in, and last fall was the first state attorney general to sue a mortgage lender over foreclosure fraud. He targeted GMAC Mortgage and Ally Financial, the parent company, and immediately demanded to meet with other top lenders in the state, including Bank of America, JPMorgan, Citibank and Wells Fargo.
The White House reaction to the emerging robo-signing scandal was rather cautious at the time. “We are looking at their process in order to determine their compliance with the law,” then–White House Press Secretary Robert Gibbs said. “Obviously, they have certain requirements under the law that have to be met, and if they’re not meeting those requirements they certainly face fines from us and they can face legal actions from homeowners.”
Cordray opened a much more direct line of attack on the industry itself. “What we’re talking about here is not just sloppy paperwork,” he said. “We’re talking about fraud in a court of law. The [foreclosure document signers] were lying under oath, to a judge.” He later characterized the big banks’ foreclosure processes as “a business model built on fraud.”