A Fighting Chance (32 page)

Appearing in front of a panel of mostly hostile members of Congress is like testifying in court—everyone is on edge and very formal. The agency was off to a strong start and we hadn’t done anything wrong, but I sure felt as if I were on trial.

Most of the questions from Republicans concerned the foreclosure scandal. In particular, several of the representatives asked why I had offered advice about the bank settlement. They didn’t ask nicely. Whatever their words said, their tone said, “How dare you!”

The Democrats did their best to defend the agency, but for the most part it was two and a half hours of the same questions over and over, with each attacker working on his or her five-minute turn in the C-SPAN spotlight.

Over the next three months, I would be called back to the House to testify two more times. The second hearing was dubbed “Who’s Watching the Watchman.” Each session was worse than the last. After one hearing, a reporter observed that several members of Congress “seemed to lack the basic facts about the new agency they were trying to oversee.” One congressman was confused about how long other bank regulators serve in office; he accused the CFPB of being the only banking agency whose head served a five-year term (not true: several others do, too). He also didn’t understand the rules for how funding is set in Washington and seemed to think the agency was the only banking regulator that was outside the political appropriations process (not even close: all of them are). Another congressman asked me to explain what was meant by a clause in the Dodd–Frank Act, as if
I
had enacted the law instead of Congress itself.

That was embarrassing enough, but then Congressman Patrick McHenry, a Republican from North Carolina, flatly accused me of lying. Not lying about anything substantive, but lying about our previously agreed-upon schedule.

I had triggered this outburst unintentionally. All the members of Congress in the room had finished asking their questions, and I asked to be excused, noting that we had arrived at the agreed-upon end time for the hearing. Congressman McHenry declared: “You’re making this up.” Huh? He got pretty worked up about it. Congressman Elijah Cummings seemed genuinely appalled and tried to calm down McHenry, but it didn’t work. McHenry “absolutely blew a gasket” (or at least that’s how Rachel Maddow described it when she ran the video later that day).

The video of the hearing went viral, and the congressman’s Facebook page was overrun with tens of thousands of angry messages. I was surprised that so many people paid attention to the incident, and I felt a little embarrassed. In retrospect, I should have just stayed for as long as he wanted to make me sit there. But the whole thing—from the first attack to the YouTube moment—made me feel like Alice in Crazyland.

As the manufactured “scandal” about trying to hold the mortgage companies accountable continued to excite the Republicans, Secretary Geithner got a lot of questions about the consumer agency’s role. By now, he had a pretty good view of what the agency could do. Our work was still in the preliminary stages, but I think it was becoming clear that we were building tools that would help make the credit markets work for families.

That spring, Secretary Geithner appeared before the Senate Banking Committee to testify about the economic state of the country. Senator Shelby used the opportunity to question him repeatedly about the role that I had played in the controversy over how the banks should be penalized. The secretary never wavered. He backed me up, verifying that he had asked for my involvement. It would have been easy for him to point a finger or just stay silent, but he didn’t. Secretary Geithner and I had had our differences, but when the consumer agency came under attack by the Republicans, he had our back.

I had no doubt—zero—that the banks should be held accountable for breaking the law. And I thought the repeated grilling about my role in trying to hold these banks accountable was ridiculous. It was so obviously a concerted effort to distract attention from the terrible behavior of the banks. Even so, I worried that I would make some little misstatement in a hearing and cause a problem for the agency. The attacks—the constant demands for e-mails and the endless prep sessions—sucked up time, time that should have been spent on solving real problems. And all the political nonsense distracted from what should have been the focus: Would the big banks ever be held accountable, and would they ever be forced to repair the damage they had done to so many families?

Who Will Be the Director?

As the spring rolled on, two questions came up more and more: When would the president nominate a permanent director for the CFPB? And who would he pick? The new director wouldn’t report to Tim Geithner; he or she would be confirmed by the Senate and run an independent agency.

After spending many months setting up the agency, I realized that I had come to love this job. I had never thought I would love any job as much as I loved teaching, but it had happened. I loved the difference we were making; I loved the feeling that we had a chance to level the playing field for people who needed it. We were just getting started, and I felt worse and worse about the prospect of leaving the agency. So I took a deep breath and asked if the president would let me stay.

Once again, I had a round of talks with various of President Obama’s senior advisors. The conversations generally ran to a pattern. First came the nice stuff: They told me I was doing a great job setting up the agency. That I was an effective consumer advocate. That the agency was getting lots of praise for its work. Lots of nice words, always followed by “but.” As in: “But … for some reason, you are like a red-hot poker in the eye of the Republicans.” According to the president’s team, the Republicans in the Senate were still adamantly opposed to me. Worse, the Republicans would never even let the issue come to a vote, so there was no way I could get confirmed.

So I tried a different tack: If I can’t get confirmed, would the president consider appointing me during a congressional recess? The tenure of a recess appointment is limited by law, but it could give me up to two years in the job of director while we established the agency’s course. The answer was the same: No. The president wanted a director to be confirmed through the proper channels.

The rumors continued to swirl through the press, and speculation that the president would name me grew over time. In May, Senator Shelby and the other Senate Republicans decided to apply a little counterpressure. They sent a letter to the president saying they would not agree to confirm
anyone
to be the director unless their demands were met. Their demands? They all added up to one thing: The agency must be substantially weakened.

The Republicans included a lot of items on their wish list, but one was the most telling: They insisted that Congress have control over the agency’s funding. In US history, no banking regulator has
ever
been funded through Congress; instead, the regulatory agencies had covered their costs directly or indirectly through banking fees. The reason is pretty obvious: to keep the regulators safe from political pressures. But the Republicans informed the president that Congress (and, of course, the banks) wanted to determine how much food the consumer watchdog would get. They knew that a starving watchdog wouldn’t be nearly as big a threat.

Some people saw that letter as a declaration of war (Washington style, that is). Never in history had a minority in the Senate “pre-rejected” a presidential nominee just because they didn’t like the agency he or she was due to run. The Republican minority was using the filibuster threat to try to change the law of the land—a law that a majority of the Senate had passed, a majority of the House had passed, and the president had signed. Progressives were outraged, and a number argued that this was the right moment for the president to fight back: He should nominate me, have a showdown with the Senate Republicans, and then, if needed, make a recess appointment.

The Memorial Day recess was coming up. The Republicans upped the ante: not only were they refusing to confirm a director, they intended to prevent the president from having any opportunity to make a recess appointment. How? They would go on vacation as they always did, but they would use a parliamentary trick to keep the Senate officially in session so they could claim it wasn’t a recess. The press immediately declared that this was another move to keep me from becoming the head of the consumer agency.

Once again, the agency and the question of who would become its director had become the center of a gale-force storm. Calls from the media came in every day. Reporters tried to stop me on the street. Friends telephoned from all over the country. I got encouraging e-mails and atta-girl messages left on our home phone. I couldn’t get my hair cut without people stopping by to tell me to hang in there. Otis faced repeated interruptions of his late-night walks when people stopped to ask about the agency and promise their support.

In the midst of all the hubbub, I got a letter that stood out from all the others. Handwritten on congressional stationery, it looked a little like a thank-you note for a wedding gift. Ever polite—I guess that for him it still wasn’t personal—Chairman Spencer Bachus wanted to let me know that he wouldn’t support me or, for that matter, George Washington himself to be head of the consumer agency.

Deal … or No Deal

In June, the president called me in to talk about the agency and the question of who would run it. This was our first one-on-one meeting since he’d asked me to take the interim job almost a year earlier.

He left no room for ambiguity: I wasn’t going to get the nomination.

I was disappointed, but not surprised. The president had never promised to nominate me. In fact, it was pretty clear from the beginning that he wasn’t itching to give me the post. He hadn’t nominated me a year earlier, he hadn’t given me a recess appointment during the past several months while I’d been doing the job, and his advisors had consistently told me not to get my hopes up.

The president then explained that he planned to make a deal with those who opposed me: He would agree not to nominate me, and in return he would get the Republicans to stop the filibuster threats and allow a vote for the nominee.

I pressed the president: Was he sure he could lock in this deal? Along with everyone else, I had read the letter from the Republicans, and it sounded like they were in no mood for compromise.

The president told me not to worry; he was pretty confident they could work out the deal. They just needed a nominee who wasn’t me.

If I couldn’t do it, I thought that Rich Cordray should be the president’s nominee. Rich, who had done a great job putting together the CFPB enforcement team, has both nerve and skill, exactly what would be needed to lead the new agency. The president was on board with Rich.

The White House plan was based on the premise that I was radioactive, but someone else could get through the Senate. If that was correct, then I felt like I knew an inside joke:
any
tough director would cause the bad guys a mess of trouble—and Rich is as tough as they come. The Republicans and the banks had succeeded in their effort to push me out the door, but I knew that Rich would work his tail off to make this agency a fighting force for working people.

On July 18, 2011, I stood beside the president in the Rose Garden while he announced his nomination of Rich Cordray as director of the CFPB.

But the decision to choose Rich changed nothing. Within hours of learning about the Cordray nomination, the Republicans declared that his candidacy for director of the agency was “dead on arrival.”

Oh. It turned out there was no deal after all.

The Last Meeting

Bruce and I gave up the apartment, and Otis gave up the much-loved elevator. We gave away our furniture to young CFPB staffers and packed up the car with our personal stuff. There were good-bye parties that nearly tore my heart out. I’d asked so many of these people to come work for the consumer agency, and they had put every fiber of their being into giving the agency the best possible start. I wanted to stay and fight alongside them. But I needed to suck it up and move on. My time was over.

On my last day at the agency, I went to the White House to hand my letter of resignation to the president in person. Once again, he took me outside. Once again, it was hot. But this time, the conversation was different.

We talked about the foreclosure disaster and the millions of families still in trouble. We talked about the increasing stress on the middle class. And we talked about the future—about where the country was headed, about a growing band of Republican extremists.

Eventually we got around to the big Senate race that was brewing in Massachusetts. He talked about the Senate and how, if I ran and beat Scott Brown, I’d have a lot of opportunities to fight for the economic issues I cared about.

The president said he liked Rich Cordray, and he thought he would be a good leader for the consumer agency. I agreed that Rich would be terrific.

I thanked him for the chance to serve, and I left.

A Victory

After I left the agency, people in the media all asked a version of the same question: What would I do next? I told everyone the same thing: We’re taking a trip to Legoland.

And that’s exactly what we did. Bruce and I flew out to California, where we gathered a herd of nieces, nephews, kids, and grandkids—we were more than a dozen in all—and traipsed across Legoland, Disneyland, and the Los Angeles beaches. I proved yet again that I can get lost anywhere, including the kiddie boat ride at Legoland, where I somehow managed to get my putt-putt boat turned completely backward. My passenger, Lavinia, and I got rammed repeatedly by a dozen other boaters—and I was severely warned about bad boating from the skinny teenager running the ride. All I can say is, steering a boat at Legoland is trickier than it looks.

The break was comforting and peaceful—at least as peaceful as anything involving a mob of rowdy children can be. But I still woke up in the night thinking about the agency. I was worried: Rich’s nomination was already stalled in the Senate and the Republicans were on the attack, demanding again that the CFPB be weakened. Without a confirmed director, the agency would not be granted its full powers. And no one knew if the Republicans in the Senate would ever allow a vote or if the president would ever make a recess appointment.