Gary Cohn gave Richard Cordray, the head of the Consumer Financial Protection Bureau, an ultimatum over dinner a few weeks ago: Go the easy way, or go the hard way.
Cohn, President Donald Trump’s top economic adviser, had heard the rumors that Cordray wanted to run for governor in Ohio. He left dinner that night thinking that they were true, according to people familiar with the meeting. So the White House decided to hold off on firing Cordray. Trump didn’t want to cause a sensation that could boost his candidacy and juice his fundraising.
Few inside the Beltway provoke as much hostility and condemnation as the pioneering consumer watchdog, who was appointed by President Barack Obama. Financial Services Chairman Jeb Hensarling, like Trump, wants him removed. Financial lobbyists fume that he’s abusing his power. Even some Democrats are unhappy that he took so long to get wise to the bad behavior of banks like Wells Fargo.
Cordray — whose five-year term expires next July — has yet to announce his political intentions and his window for launching a gubernatorial campaign is starting to close. But whether or not Trump ultimately decides to fire him, he may already have enough political support to lead the field to replace Republican Gov. John Kasich in 2018.
While Cordray might look unpopular in Washington, in Ohio he has a far different reputation. If he does run, he could be the only Democratic candidate with the chops to defeat a strong Republican opponent.
“He would clear the field,” said Republican strategist Mark Weaver. “There’s nobody else who has the credibility in the Democratic Party. He is a credible candidate who would come into the race and instantly be able to raise money.”
Meanwhile, Cordray’s life in Washington isn’t easy. During five hours of congressional testimony in early April, he took a beating from Republican lawmakers for being too hard on banks, car dealers, credit unions, payday lenders, everybody. Then he took a beating for being too easy on them. “Asleep at the wheel!” said Rep. Ann Wagner (R-Mo.). There were snide remarks, accusations, and a subpoena.
“Boy, they really hate you, don’t they?” said Rep. Michael Capuano (D-Mass.), a Cordray ally who went on to defend the beleaguered regulator.
Yet back home, even bankers like him.
“We have no quarrel with Rich,” said Jeff Quayle, senior vice president of government relations at the Ohio Bankers League. “He was given an incredibly hard job to do, starting a new agency from scratch. That was bound to lead to conflict.”
Banker love is no small thing in Ohio, a financial hub that has given rise to industry powerhouses. JPMorgan Chase & Co. is one of the largest employers in Columbus. In Cincinnati, U.S. Bank, Fifth Third Bank and PNC Bank towers mark the skyline.
During a break from his punishing Financial Services Committee hearing on April 5, Cordray was asked to explain his popularity with Ohio bankers. He had a ready answer.
“They know me,” he told POLITICO. “I’m sincere. I’m trying to do the right thing.” Then, like the practiced politician that he is, he ticked off his pro-business successes as state treasurer and attorney general. He volunteered that Ohio auto dealers like him, too.
Maybe. The Ohio Automobile Dealers Association didn’t respond to repeated phone calls and emails. Executives at Key Bank, Fifth Third, U.S. Bank, JPMorgan Chase and Huntington Bancshares didn’t want to talk publicly about one of their top regulators.
All have donated to Cordray’s state campaigns over the years, but none have since escaped the scrutiny of his agency, which has levied fines over auto lending, mortgages, bank fees and credit monitoring.
At least Cordray keeps in touch. On most Thursdays, he flies to Grove City, Ohio, where he works from home and spends time with his family.
“It’s one of the things bankers in the state love about the guy. He gets a perspective outside of the Washington bubble,” Quayle said. “How many policymakers do that?”
On a trip home last month, Cordray sat down with CNBC at Lilly’s Kitchen Table, a neighborhood diner. He stuck to his consumer-protection script, but the interview — shirtsleeves, khakis, burgers and fries — had all the trappings of a campaign stop.
If Cordray does run, victory is far from guaranteed. Trump took Ohio in a walk and Republicans outnumber Democrats in the statehouse. Cordray might also have to face off against Republican Mike DeWine, a formidable opponent who has defeated him once already, when he upset Cordray’s bid for re-election to attorney general in 2010.
No Democrats currently in the ring — former state Rep. Connie Pillich, Ohio Senate Minority Leader Joe Schiavoni and former Rep. Betty Sutton — have won a statewide election.
Ohio has long been solidly purple. President Ronald Reagan won the state by more than 850,000 votes with his “Morning in America” campaign in 1984. Just four years later, Ohioans re-elected an icon of the progressive left, Howard Metzenbaum, to the Senate. President Barack Obama took the state by comfortable margins twice.
Trump’s winning campaign had echoes of Reagan’s message, appealing to voters afflicted by the anemic economic recovery and hollowed-out middle class. As CFPB director, Cordray delivers a similar message, talking frequently of wealth inequality and “economic rights.”
“Ohio is still a swing state,” Republican pollster Whit Ayres said. “A number of Ohio counties swung sharply from Barack Obama to Donald Trump but the fact that they had voted for Barack Obama in 2012 and probably 2008 means that they could very well swing back depending on the particular candidates involved.”
Ohio Democrats are hoping that he will get into the race.
“There’s a definite hunger for him to run,” said Greg Haas, former chairman of the Franklin County Democratic Party. “He’s very popular.”
In his office at the CFPB, Cordray keeps a picture of himself with pioneering Ohio banker John G. McCoy — the G stood for “God,” Cordray says — who took the young lawyer under his wing decades ago.
McCoy, who built Ohio’s Banc One into a national institution that eventually was acquired by JPMorgan Chase, urged his fellow bankers to support Cordray’s political career from the start.
“John was a conservative Republican; he gave a lot of money to Republican candidates, but he supported Rich in every race he was in,” said Michael Van Buskirk, who ran the Ohio Bankers League until his retirement in 2014. “John hated bank regulation, but he really respected Rich.”
“Can he be elected? It will be a close race depending on who he’s running against, but yes, he can,” said Van Buskirk, a Republican. “He’s the kind of guy who should be in government because he tries to get it right.”