Speculation has abounded that Richard Cordray, the direct of the Consumer Financial Protection Bureau, will run for governor of Ohio. Now, Cleveland.com has added more grist to the rumor mill, reporting that Ohio Supreme Court Justice Bill O’Neill said that he has been told Cordray is planning to run.
O’Neill said the friend, whom he declined to name, “openly stated” that Cordray is going to enter the 2018 Democratic gubernatorial primary. The friend called to see whether O’Neill would stick to his past statement that he would stay out of the 2018 Democratic gubernatorial primary if Cordray entered the race.
Read the story here:
The political calculus of a Cordray candidacy is currently being done in Washington, according to Politico, which reports that the Trump administration is leery of firing him because of the election and that even the Ohio Bankers League says Cordray is okay. Read the story here:
All of this points to a very complicated picture for the financial services industry. On one hand, Republican efforts to alter the Federal regulatory landscape are being affected by state level politics in this case. It may slow potential changes to the CFPB in particular. On the other hand, if Richard Cordray runs on his record of being a consumer advocate and opponent to the Trump administration, then he may push for state laws to fill any gaps he sees in the federal regulations. This could lead other states to follow suit, which could complicate life for payments providers.While the financial services industry has a specific set of political concerns, in general, it viewed the results of the 2016 election favorably. The Ohio gubernatorial election and the 2018 Congressional midterm elections will be seen as referendums on the national direction, and most people will not vote based on what they think will happen to financial services regulation.
The industry will need to be prepared for a shift in the political winds, and it must prepare to articulate a case of how its products are good for consumers and why over-regulation would be bad for consumers. Arguing for rolling back regulations on the basis that they are bad for business is easier when the powers that be are suspicious of any government activity. But a different case will need to be made if a change in control occurs at either the state or federal level.
Overview by Ben Jackson, Director, Debit Advisory Service at Mercator Advisory Group