The Biden administration is considering Richard Cordray, the first director of the Consumer Financial Protection Bureau, to become the Federal Reserve’s top banking regulator, according to three people familiar with the nomination process.
Cordray also has experience navigating tricky political waters. He was appointed to lead the CFPB by President Barack Obama in the aftermath of the Great Recession to regulate lenders and companies involved in consumer finance. His nomination was contested for months because of Republican opposition to the structure of the bureau’s leadership.
Reached by phone Tuesday, Cordray declined to comment. Cordray left the CFPB when the Trump administration came into office. He is also a former attorney general of Ohio.
Though much anticipation revolved around the nomination of Jerome H. Powell for another term as Fed chair, Democrats and left-leaning economists have been particularly concerned about President Biden’s choice to become the Fed’s top banking cop — formally known as the vice chair for supervision — given the job’s vast authority over the banking sector.
President Donald Trump’s pick for the role, Randal Quarles, was criticized by left-leaning economists and lawmakers for gradually easing restrictions on Wall Street that were put in place after the Great Recession. The job has been vacant since October, with many Fed watchers frustrated that the White House hasn’t moved faster to name a nominee.
Liberals are urging Biden to pick a candidate who will restrengthen banking rules put in place since the financial crisis. They are also pushing Quarles’s replacement to focus on the ways climate change poses risks to financial stability and overall economic activity.
Over the past few months, Sarah Bloom Raskin, a former Fed governor and former deputy secretary of the Treasury Department, has also been mentioned for the job by liberal economists and others close to the Fed. It’s unclear how closely she is being considered by the Biden administration.
People close to Capitol Hill and the White House said Cordray specifically has support from Sen. Elizabeth Warren (D-Mass.), who has sharply criticized the Fed’s moves to relax Wall Street oversight. Warren is also opposing Powell’s renomination as Fed chair, having previously called him “a dangerous man” over his record on banking issues.
Warren’s office declined to comment. A spokeswoman for Sen. Sherrod Brown (D-Ohio), who chairs the Senate Banking Committee, also declined to comment.
Biden has a tremendous opportunity to shape the central bank. Last week, he reappointed Powell as chair and elevated Lael Brainard, the Fed board’s only Democrat, to vice chair. Now attention shifts toward how the administration will fill the central bank’s remaining vacancies.
In addition to vice chair for supervision, there are two empty governor seats. Last week, Biden said additional Fed nominations could be expected starting in early December.
The White House’s Fed nominations come at a highly consequential time for the central bank, which is grappling with inflation at 30-year highs and looming questions over how monetary policy should respond.
