Prepared Remarks of CFPB Director Richard Cordray at The Ohio State University John Glenn Leadership Forum
Good morning. Thank you for the opportunity to speak here this morning at the John Glenn College of Public Affairs. The opportunity is especially meaningful for me, since my first formal experience in public service was through an internship with Senator Glenn in the spring of 1980. I was a bright-eyed, bushy-tailed college student, and I was grateful for the chance to see a bit of Washington up close. I recall working up what I no doubt regarded as some very eloquent responses to constituent correspondence (which arrived by the bushels in Senator Glenn’s office, in particular). I also recall being set loose to cover some interesting Senate hearings on farm policy and the future of the auto industry (though I could hardly have anticipated the travails would lie ahead for that important industry). But most memorable of all was the occasion late in my internship when I had the opportunity to shadow the senator all through the day, seeing just what he saw and hearing just what he said and heard. This brief exposure, and his powerful example, were inspiring to me then and are still inspiring to me now.
In that era, and perhaps now again in our own, an important and seemingly difficult question presented itself to young people like myself: Why public service? For I began to come of age, and pay attention to public affairs, only in the early ’70s. What did I see? First I saw a vice president of the United States who was forced to resign from office for his current and former crimes of corruption. Soon after that I saw the president of the United States reluctantly resign in disgrace as he faced the growing likelihood of impeachment proceedings arising from the Watergate scandal. During the same era, the country saw widespread activism and unrest, the assassinations of Dr. Martin Luther King and Bobby Kennedy, the Vietnam crisis, and the shooting deaths of the Kent State students here in Ohio. It was nobody’s finest hour – not the leaders, not the public, and not the country itself. When I went off to college and began to think to myself and say to others that I was interested in government and even perhaps in politics, many level-headed friends of my family who cared deeply about me made it clear that they viewed my interest as quite ill-advised.
Over the course of an enduring career in public service that now spans a quarter-century, I have often been asked where my interest in this chosen field may have developed. What may be most surprising is that I have found myself groping over the years to answer that question for myself. In one sense, I am quite aware that it has much to do with my parents and the example they set. My father spent his entire career – 43½ years – working with the developmentally disabled, first as an aide and eventually as the program director of the largest residential center in Ohio. He is now gracefully retired at age 97. My mother, who passed away long ago when I was still in college, was a social worker and a teacher who also founded the first foster grandparent program for the developmentally disabled in Ohio – all of which partly explains how she met and won over that formerly confirmed bachelor.
Even when we were very young, my brothers and I spent much time with the residents who were the objects of their care and affection. I suppose today we might say, in a rather more “hifalutin” way, that we were volunteering or were engaged in community service. At the time, though, we were just imbibing our parents’ example of true public service, showing through the steady persistence of unsung, everyday effort what it meant to strive conscientiously to improve the quality of life for others, who needed and deserved that attention and effort from them. And although I have found plenty of ego on display in the public realm, there is no doubt that “others” is a powerful concept located somewhere near the heart of what I hold to be this high calling.
Different elements in different cultures appear to have cultivated distinctive views on the value and importance of public service. For many of the ancient Greek philosophers, the task of ruling was a burden to be borne only when unavoidable, with the preferred state being to maintain and exalt one’s independence from such grubby matters to embrace the purer and cleaner life of the mind. In the virtuous days of the Roman Republic, it was accepted that this responsibility fell upon certain families that were destined and expected to govern the affairs of state and to fulfill the extensive and versatile demands of leadership in the civic life. In the early theocratic states, the leaders were understood to be chosen for that primary purpose, expressly anointed by God and imbued with his power and wisdom to carry out the duties of leading their people in obedience to their laws.
Each of these models feels distant from the form of democracy that has evolved in the United States and increasingly around the world. Our leaders must be both self-selected and ratified in some manner by the public. They typically hold their authority for a limited period and in a limited manner. They comprise a mixture of elected and appointed officials, whose personal power is specifically constrained by the laws and the Constitution and is subject to extensive checks and balances to prevent undue arrogation of power in any individual. Public opinion is a chief source of public authority, both as formally registered at election time and as weighing heavily upon all participants during the extent of their involvement in public matters.
In my case, I have had the opportunity to serve in each of the legislative, executive, and judicial branches of the government, and I have served at each of the local, state, and federal levels of government. I have held different positions by personal selection, by public election, and most recently by nomination and confirmation. From my personal experience, I can say to those who aspire to hold such positions that every such process can be arduous and potentially frustrating, and often is tinged with disappointment and rejection. Over the course of my career, I have been chosen but also declined for various positions by each of the means described. In the electoral arena, in particular, I have won two primary elections and lost another; I have won five general elections but lost three. In 2008, I received more votes than any Democratic candidate for state office in the history of Ohio; yet just two years later, I was defeated for re-election by 1 percent of the vote.
The vagaries and hazards of public service fall unevenly on different people. One of the things that I always am curious to know about any public official is whether they have ever lost an election. I can tell you that few experiences in life feel as bleak as losing an election – running for office all year and having nothing to show for it in the end, after sustaining a highly public and very personal snub from the voters. Timing has a great deal to do with political results, and the opportunities for public service in that arena are correspondingly hostage to fortune. Yet I also eventually learned that campaigning for office offered the kind of education that you could never get in school – breathtakingly broad exposure to all kinds of people, perspective on the many different elements of our society, and a challenging test of one’s own personal grit and the capacity to understand and persuade others on matters of public concern.
One point that has mattered enormously in my own case has been the influence and support of mentors. As I mentioned earlier, Senator John Glenn was my earliest mentor in public service, and he later helped me, starting with my first campaign for the State House in 1990 all the way to my latest campaign for attorney general in 2010. His deep humility about his glittering record as a military hero, a pioneering astronaut, and a public leader has stamped itself on my mind as applying all the more emphatically for us lesser mortals. Yet he also has a great sense of humor, and one of my warmest memories of my most recent campaigns was to find something special he has in common with my Dad – both of whom grew up in eastern Ohio during the Depression – as both of them to this day can quote rollicking passages from Robert Service, the poet of the Yukon, from memory. And he carries with him a deep idealism, which is a quality I seek to emulate constantly, even in the face of the brickbats and larger obstacles that we all encounter.
The judges I worked for at the beginning of my legal career – Judge Robert Bork, Justice Byron White, and Justice Anthony Kennedy – taught me enormous lessons in attention to detail. They worked to square the rule of law with actual governance, grappling with how lasting principles should be applied to the real-life situations that emerge in concrete cases. Each of them also taught me the inner worth of disagreement as a means of sharpening our thinking and seeking out possible consensus without surrendering our values. I think it is fair to say that each of these jurists has been known for their own fierce independence of thinking. Yet they never sought to suppress that same quest in me or my peers. Instead, they showed us true respect by pressing their strong differences of opinion in vigorous discussions while expecting us to do the same.
In my early career in government service, I was fortunate to have the support and protection of perhaps the most influential lawyer-legislator in the history of Ohio, Harry J. Lehman. During his time as chair of the House Judiciary Committee, he worked on the development and adoption of the Ohio Rules of Civil Procedure, the Ohio Rules of Criminal Procedure, and the Ohio Rules of Evidence (all of which still govern all trials in all courtrooms everywhere in the state), while fielding and resolving an immense array of other legal and constitutional issues. When he retired from the General Assembly, he admirably said that “they will not be able to say of me, ‘no runs, no hits, no errors.’ There have been plenty of all three.” Having borne the sacrifices of public service himself, he understood and welcomed my early ambitions in that direction, even when I was trying unreasonably to be a lawyer and a legislator and a law professor all at the same time (Harry has spent many years at all three professions himself). He also impressed upon me the important admonition to remember, always, that public service is not only noble and useful, but also should be an interesting and enjoyable kind of fun.
When I later turned my attention to financial offices, first as county treasurer and then as state treasurer, I had the good fortune to re-engage with Mary Ellen Withrow, the former Ohio treasurer and U.S. treasurer. She led by the power of her example, finding ways to expand the footprint of an executive office to benefit the public. In her case, she created novel initiatives such as the Linked Deposit program – a small business loan program to create jobs that flourished during her tenure and which I later revived and reinvigorated as the highly successful Grow Now program. Another was the STAR Ohio program, which pooled together surplus local government and school district funds to yield higher and safer investment returns – another program that I was able to build on and expand during my tenure as state treasurer. As U.S. treasurer under President Clinton, you would know her by innovations such as the state-backed quarters, the big-faced bills with intricate anti-counterfeiting techniques, the Sacagawea dollar coins, and much else. She was unafraid to experiment with new approaches, figuring that her successes would outshine her failures, a courageous spirit which I have tried to take very much to heart myself.
Circling back for a moment to my parents, one key lesson that I learned about public service is that it comes in many different colors and shapes and flavors. If the essence of public service is leadership, one can exercise this quality from many different positions in our society. To begin with, we tend to equate “public service” with “the public sector.” Even that sector is quite broad and diverse, ranging from civil servants like my parents to appointed and elected leaders in all three branches of the government. Everyone who serves the public in government has a role to play and the opportunity to fulfill that role in a way that is beneficial to others.
For example, my Dad once told me a poignant story from the outset of his career. He was trying to allow a large collection of troubled youths – who may or may not have had any developmental disabilities – to be allowed to spend just twenty minutes outside doing exercises. This would be a simple break from rigid confinement in a building where they were basically incarcerated. His boss insisted that it could not be allowed, that the boys could not be trusted not to run away. My Dad went back again a few weeks later and said he would be held responsible for their conduct, and his boss finally relented. He then told the boys they had a chance to try something, and if they could handle it well, there might be a chance for more. Eventually this grew into extensive recreational programs that saved countless young people, otherwise lost in the system, from a dreary life of perpetually fettered gloom. In my view, that is a shining example of public service.
But there is much more. One tremendous fact about America is that we are a society marked by the prevalence of what Alexis de Tocqueville called “voluntary associations.” He exclaimed over “the immense assemblage of associations” that he saw in this country, and “admired the extreme skill with which the inhabitants of the United States succeed in proposing a common object for the exertions of a great many [people] and in inducing them voluntarily to pursue it.” What was once known as the eleemosynary and philanthropic elements of our society, which we now refer to more plainly as the “nonprofit sector,” is another strong foundation for exercising leadership in the service of others. Important institutions such as churches, hospitals, charities, foundations, legal aid groups, and the like are the source of much good in our society, often in conjunction with but also quite distinct from any government involvement. Some of these associations are a far cry from the small volunteer societies that Tocqueville described, although PTAs, Sunday schools, and other civic groups still have a sturdy presence in our communities. We should honor and appreciate their many contributions as well, and recognize that many of these entities have their rightful claim to the mantle of public service.
I have also come to understand better than I did many years ago how leadership and service to the community are manifested in the private sector as well. This is, of course, the “for-profit” sector, and to some people that taints any association with “public service.” But people must and do make a living in every walk of life in our economic system, and a high sense of public responsibility can be infused into a business enterprise just as much as in any other human organization. In fact, I would argue that the private sector does not fulfill its proper role without the kind of responsible leadership that imports conceptions of service to the public into their everyday affairs. These are actually straightforward precepts: doing business “the right way,” complying with the law, treating people fairly, providing excellent customer service, building a lasting business that can benefit all of its diverse stakeholders, creating value for its customer base, and competing effectively in the marketplace. These are all hallmarks not only of high business ethics, but of sustainable business excellence.
It is not a facetious phrase to me from a bygone era that we would think of “captains of business” as being judged once again by how they benefit others – here measured by the profits that flow from creating and sustaining value in a fair exchange with their customers. And so in my current work, which I will speak more about in a moment, I have no qualms about holding the leaders of our nation’s most significant financial institutions to a high standard of conduct. Some of the expectations that I just described are required by law; others are not; either way, there is a more tangible standard of serving the public that I find many corporate executives have in mind and envision themselves as trying to meet. Yet I also believe that our corporate leaders may at times need appropriate regulatory pressure to countervail against the insistent shareholder pressures to pursue pure profit regardless of how they do so. If markets work properly, ultimately it is the consumers above all who benefit from the successes of our businesses.
Finally, I would be remiss to talk about the joys and the challenges of public service and not spend some of my time discussing my current work as the first Director of the Consumer Financial Protection Bureau. In many ways, it is as though much of the jumbled experience of the previous decade led almost naturally to this position, which I could not have anticipated and never expected. The financial education that I received as a public treasurer, which led me to know much about the practical side of the mortgage originations, mortgage servicing, and debt collection, gives me unique perspective on those issues. The legal education that I gained as an attorney and law professor and then applied as attorney general to such issues as consumer protection, payday lending, debt collection (again), mortgage servicing (again), and the financial abuses on Wall Street, has helped me address similar issues at this new agency. The executive and management experience that I gained through a succession of smaller to larger offices helped me have some sense of how to run this agency. Having said that, almost nobody has ever had the experience of doing what we have been asked to do, which was to build an entirely new federal agency from absolutely nothing to steady-state in less than five years.
There is, of course, a certain amount of sacrifice here just as there is in any other form of public service. After the president first nominated me to this position, it took two full years for the Senate to confirm me, which it ultimately did by a healthy vote. The resulting uncertainty cemented for my family that I would have to commute back and forth between Ohio and Washington, because we had settled into that pattern well before my own status was finally resolved. Moreover, there is a certain amount of angst and criticism around any new government agency, and we have fielded our share of it, though I am quick to point out that if that is the price we have to pay to do the kind of work we are able to do, then it is well worth it. And one more discouraging thing about any large project is that even though you want so much to do the right thing, you may not be in a position to know whether you managed it until a considerable time has passed. So you need to be able to have confidence in those around you, and you need to remain open-minded to the evidence that will demonstrate the truth over time. The anxiety of getting things right is a weight that people in many walks of life – including me here – carry around with them, and it is impossible not to feel that weight if you care about what you are doing and believe it to be important.
We certainly do feel that way at the Consumer Bureau. The opportunity to serve as the first Director of this organization, alongside my exceptionally talented colleagues, has been one of the great privileges of my life. We are the nation’s first federal agency whose sole focus is protecting consumers in the financial marketplace. The effects of the financial crisis – millions of lost jobs, millions of lost homes, and trillions of dollars lost in household wealth – remain vivid in our collective experience. So when Congress responded by enacting the financial reform law five years ago, it charged the new Bureau with responsibility to stand on the side of consumers, make sure they are treated fairly, and help restore trust in the financial marketplace.
We have been fortunate to have great mentors to help us along the way – notably Elizabeth Warren, now the senior Senator from Massachusetts, who conceived the idea of the agency, fought for its creation, and led its initial stand-up efforts. We also owe much to President Obama, who strongly pushed for our agency and has constantly supported it, including during the prolonged but ultimately successful struggle to seat a confirmed director.
Since opening our doors, we have made considerable progress in fulfilling our rulemaking, supervisory, and enforcement responsibilities to protect people all across the country. We have finalized sweeping new rules to improve the mortgage market and address the problems that led to the financial crisis. To date, our enforcement actions have resulted in over $11 billion in relief for over 25 million consumers. Our supervisory actions have changed and improved countless financial practices and have secured redress for another 1.8 million consumers. We have also handled more than 700,000 complaints from consumers, addressing all manner of financial products and services; we have worked to secure relief where possible and we have prioritized matters for further investigation and action where justified. We are creating powerful new tools for education and engagement that help consumers know what to expect in the financial marketplace and understand what they can do to protect themselves and assert their rights against financial predators.
In all of this work, we recognize that ultimately our job is to improve the everyday financial lives of 320 million Americans. That is an enormous responsibility and a worthy challenge, one that we must approach humbly and realistically, but also conscientiously and energetically. The same tenacity that is required to accomplish anything in public service is likewise called for in our work at the Consumer Bureau. What Professor Max Weber once said about politics is just as true of public service: it “is a strong and slow boring of hard boards. It takes both passion and perspective. Certainly all historical experience confirms the truth – that man would not have attained the possible unless time and again he had reached out for the impossible.” Weber tells us that this requires us to arm ourselves with “steadfastness of heart.” This reminds me of a quote from Albert Camus’ Myth of Sisyphus, which a friend sent me when I was first nominated: “The struggle alone is enough to fill one’s heart.” The common theme here seems to be qualities of the heart; and so we will gladly devote ourselves to continuing that struggle, steadfastly.
The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.consumerfinance.gov.