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Obama Appointing Cordray as Consumer Watchdog is a Win for Students

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President Barack Obama shakes hands with Richard Cordray before speaking about the economy, Wednesday, Jan. 4, 2012, at Shaker Heights High School in Shaker Heights, Ohio.

CREDIT: ASSOCIATED PRESS

President Obama named Richard Cordray as the new head of the Consumer Financial Protection Bureau on Wednesday in a recess appointment, an executive power grab he used after a filibuster and “pro forma” sessions prevented the traditional Congressional approval process.

This appointment is a huge victory for American students and their families, many of whom have been burdened by student loan debt, aggressive debt collectors, and the “predatory” lending practices that got them there, Obama said in a speech Wednesday afternoon in Cleveland.

“If you’re a student,” Obama said, “his job will be to protect you from dishonest lending practices and make sure you have all the information you need on student loans.”

Student advocates applauded the news. Pauline Abernathy, the vice-president of The Institute for College Access & Success, suggested in a statement some specific ways that the CFPB can help borrowers:

We urge the Bureau to move swiftly on behalf of students and their families by taking steps such as curbing the flagrantly predatory private lending to students at some for-profit colleges; developing and enforcing sound underwriting and loan modification standards; and requiring school ‘certification’ of all private loans to ensure that students can make informed borrowing choices.

Progressive activists also praised Cordray’s appointment, with some suggesting that the president make additional executive appointments.

Roger Hickey, the co-director of the Campaign for America’s Future, said in a statement that members of the National Labor Relations Board should be next on Obama’s list of recess appointments. He called the board’s work “vital to protecting workers in this country.”

“Activists from all over the country will be urging the President to appoint Members to the NLRB,” he said. “The President must push back against the business lobby and stand up for workers.”

Obama said he would try to work with members of Congress on appointments in the future, but he said he will not let ideology halt the progress necessary to jumpstart economic growth and job creation.

“I’ve said before that I will continue to look for every opportunity to work with Congress to move this country forward and create jobs,” Obama said. “But when Congress refuses to act and, as a result, hurts our economy and puts people at risk, I have an obligation as President to do what I can without them”

The Consumer Financial Protection Bureau was created in 2010 by the Dodd-Frank financial reform law but remained powerless to function without a head at the helm.

Elizabeth Warren, a Harvard University law professor who oversaw the creation of the bureau, was the top pick, but was considered a “polarizing figure,” according to the Washington Post. In July, Cordray was funneled through the traditional nomination process—in which the Senate gives its OK—but was thwarted by a filibuster, holding up the bureau’s chance to get started on protecting consumers.

Cordray’s appointment is an important one for young people looking to protect themselves from predatory student loan lenders and credit card companies.

Naima Ramos-Chapman is an associate editor at Campus Progress.

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