U.S. consumer watch chief Cordray tests Ohio election waters

CINCINNATI (Reuters) – Democrat Richard Cordray gave a campaign-style speech at a sprawling Labor Day celebration on Monday, but the head of the U.S. Bureau of Consumer Financial Protection did not say if he had intends to run for governor of Ohio.

FILE PHOTO: Richard Cordray, Director of the Consumer Financial Protection Bureau, speaks in Washington, October 17, 2014. REUTERS / Larry Downing

If Cordray were to step down to run for political office, it would allow President Donald Trump to appoint a successor as the head of the consumer watchdog, which has angered Wall Street with stiff penalties for misconduct and stricter rules on loans.

“We need to come together to help each other rekindle hope, enthusiasm and the will to find and create our own opportunities,” Cordray told hundreds of union members, a key Democratic constituency, during an AFL-CIO picnic in Cincinnati. .

Cordray is the first director of CFPB, a consumer watchdog agency created under former President Barack Obama in the aftermath of the 2007-2009 financial crisis.

Originally from Ohio, he was expected to launch into the gubernatorial race and clearly appeared to test political waters with his speech on Monday.

Although many have speculated that he will take the opportunity to announce his candidacy, activists and political leaders have said that any official announcement regarding Cordray’s plans to enter the 2018 competition will wait until the CFPB finalizes a long-awaited rule restricting the activity of payday lenders.

Current Ohio Governor John Kasich, among more than a dozen Republican candidates defeated by Trump in last year’s presidential primary campaign, is barred by term limits from running for the pivotal state of the electoral battlefield.

As director of the CFPB, Cordray imposed severe penalties on banks, car dealerships, student lenders and credit card companies for alleged predatory lending practices. His reputation for being tough on banks and defending consumers has many Democrats saying it’s their best hope to take governor’s mansion and undermine Republicans’ dominance over state government.

Due to a law prohibiting officials from using their desks to advance political campaigns, Cordray would have to step down to run for governor. His term will not expire until next summer, when Democrats have already chosen their candidate for governor in the primary elections.

Members of both parties have said Trump will grab a vacant CFPB top post to keep his election promises to slash regulations and weaken or perhaps even dismantle the agency.

Republicans have long fought to dismantle the agency, saying it overstepped its authority and that the sole director, who both writes and enforces the rules, has too much power.

The agency itself has repeatedly declined to comment on rumors of Cordray’s resignation.

Critics of the CFPB say Trump could use a 1998 law to drag a person appointed by the current administration, already confirmed by Congress, as temporary director if Cordray resigns. A court ruling that Trump can fire Cordray is currently under appeal.

“He did a great job and I don’t think he should leave for any reason,” said Karl Frisch, executive director of the liberal group Allied Progress.

Additional reporting by Pete Schroeder in Washington; Editing by Bill Trott and Tom Brown

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