The Obama administration has selected Ohio Attorney General Richard Cordray, a vocal critic of the banking industry, to head the enforcement division of the new Consumer Financial Protection Bureau, according to a Treasury official.
Cordray, a Democrat, has been a leader among state attorneys general in the probe into mortgage foreclosure practices. The probe is examining whether banks submitted faulty legal documents in foreclosure proceedings.
The Obama administration will announce the selection of Cordray later today, the Treasury official said. Cordray lost his re-election bid in November to Republican Mike DeWine.
Cordray emerged as a key figure in the foreclosure probe when he announced in October that he would sue national mortgage servicer GMAC Mortgage and its parent company, Ally Financial, alleging fraud and violations of Ohio's consumer laws.
The Consumer Financial Protection Bureau is a key plank of the Dodd-Frank financial overhaul law enacted in July. It has the strong support of Democrats and consumer advocates and the strong antipathy of banks and Republicans.
The agency is expected to have broad power in writing and enforcing rules on mortgages, credit cards and other financial products directed at consumers.
Cordray would be key in trying to establish the agency as an effective watchdog.
The bureau does not officially come into being until next July. Harvard law Professor Elizabeth Warren, a special adviser to President Barack Obama and Treasury Secretary Timothy Geithner, is leading the effort to set it up.