Cordray's Former GC on the CFPB Director's Past and Future

Richard Cordray is making moves. The new head of the Consumer Financial Protection Bureau (CFPB) stopped in New York on Wednesday to discuss an inquiry into bank overdraft fees. Last week he announced a major regulatory proposal on debt collection agencies and credit reporting agencies—his first big rule proposal after a long-stalled nomination process that ended when President Obama made a controversial recess appointment in January.

Cordray’s rocky road to the director’s chair has, in many ways, set the tone for his first days at the agency: any discussion of the CFPB’s actual consumer-protection work tends to come wrapped in talk of his much-debated appointment, while Republicans continue to oppose the lack of Congressional checks on the agency’s power.

So it can be difficult to get beyond Cordray’s CFPB origin story to answer a more fundamental question: What makes him tick?

According to Albert Lin, Cordray’s former general counsel in the Ohio Attorney General’s office, the CFPB director is a detail-oriented pragmatist with a steady hand—someone who is “not ideological by demeanor,” Lin says, but rather focused on what’s occurring on the ground.

“I think he really understands the regulator’s role in dealing with complex market systems,” says Lin, now of counsel at Ice Miller in Columbus, where he focuses on private securities and complex litigation. “Rich has always felt that businesses benefit by predictable, transparent regulation, because all the companies are competing on the same level and no competitor has an untoward disadvantage toward the other. That’s how a regulator can promote business.”

Like Cordray, Lin is an Ohio native. He attended Stanford Law and practiced in California before returning to his home state with his wife and daughter in 2003.

Lin and Cordray first met when Cordray occupied the post of Franklin County treasurer, one of several roles he has held in the public sector. The two men had a common connection—Chris Glaros, a friend of Lin’s from Stanford who was active in local politics. When Cordray became Ohio’s state treasurer in 2006, Glaros became his general counsel.

While Lin did a clerkship and worked at a law firm, he and Cordray stayed in touch over the years. Cordray “was a well-regarded local office holder, and he was a very prominent and accomplished attorney,” Lin says.

But it was as state Attorney General that Cordray entered the national spotlight. Following the resignation of Ohio attorney general Marc Dann, Governor Ted Strickland asked Cordray to run for office. He won in a special election during the now-infamous fall of 2008, when Wall Street imploded.

The national fiscal crisis “affected Ohio—just like the rest of the country—very negatively,” Lin says. “There were immediately very large job losses, and the Ohio economy suffered a lot. We’re still working to get back to where we were before the financial crisis.”

The impact of the economic downturn shaped Cordray’s agenda. He needed a staff member to help manage issues relating to financial matters and securities litigation, and he turned to Lin, who signed on as general counsel. Lin reported to his old friend Glaros—the first assistant attorney general and Cordray’s top staff person. Within the 1,500-person office, Lin served as part of Cordray’s senior team, overseeing about 100 staff members and 100 of the AG’s 400 attorneys.

Their strategies for Ohio took shape in a high-rise office tower in downtown Columbus. Cordray was the steward of the office’s consumer financial protection laws, and he also represented the Ohio Public Pension System, one of the top institutional investors in the world, with more than $150 billion in assets under management.

“After we got into office, we went through a very robust period of review to determine what actions the state Attorney General’s office could take to remedy some of the harm that was caused by the financial crisis, and what Rich thought were companies that had not acted properly [leading up to] the financial crisis,” say Lin.

Over his next two years in office, Cordray’s team recovered more than $2.5 billion for investors through securities litigation. Lin aided Cordray in closing two of the largest securities class actions in U.S. history, including In re Marsh & McLennan, which was resolved for $400 million, and In re AIG, which resulted in a $937.5 million settlement. Lawsuits against Bank of America and various ratings agencies that began on Cordray’s watch, and which Lin managed, are still ongoing.

“Those were cases that Rich felt were important, and that the public pension system felt were very important as well,” Lin says.

Cordray led the office with a multidisciplinary management style that balanced financial, law enforcement, and public interest perspectives with the office’s legal function, says Lin. Given the AG’s responsibility for litigation and regulatory matters, the office could have been “very lawyer-focused,” Lin says, “but Rich made it clear from the beginning that he wanted a multidisciplinary approach, which really helped keep everyone on the same page in the many, many facets that are affected by the office.” Cordray often sought consensus among team members, and also expected his staff to be thoroughly versed in all of the issues at hand. ‘There’s an intensive diligence process with Rich when he makes large decisions,” Lin says.

Lin considers Cordray to be one of the top appellate attorneys in the country; in addition to clerking for U.S. Supreme Court justices Byron White and Anthony Kennedy, Cordray has also argued seven cases before the high court. “Because of that, I think, Rich has a very robust decision-making process,” he says. “He’s going to be able to synthesize a lot of information and grasp complex problems very, very quickly.”

After Cordray narrowly lost his 2010 re-election bid, Lin departed the AG’s office alongside of him. Cordray then joined the CFPB as the agency’s lead enforcer, and was nominated for the director position in July 2011.

As Lin sees it, Cordray brings more than a background in consumer protection and finance-related legal matters to the CFPB. Lin predicts that, as the head of the agency, “Rich is going to simplify the regulation, he’s going to make it very clear, predictable and transparent. I think it will help the business environment, while at the same time protecting consumers.”