Why I left the Democratic Party

Richard Cordray, the director of an agency created after the 2008 financial crisis to protect consumers from financial wrongdoing, said Wednesday that he will step down by the end of the month.

The first head of the Consumer Financial Protection Bureau, which was created in July 2011, announced his decision in an email sent to CFPB staff. In the email, Cordray, who was appointed by President Obama, noted that the CFPB has returned $12 billion to nearly 30 million consumers who were harmed by financial institutions.

The agency, he added, has handled more than 1.3 million complaints during his six-year tenure, which was stormy at times and subject to attacks from Republican lawmakers and to more recent criticism from the Treasury Department.

"Together we have made a real and lasting difference that has improved people's lives notably," Cordray said in his email to staff members. His tenure was slated to end in July 2018.

A CFPB spokesperson declined further comment.

Still, Cordray stressed that "there is always more work that lies ahead." In his email, he defended the importance of the agency's role, which has come under fire from certain factions on Capitol Hill, including Republicans who have been vocally critical of the CFPB's pursuit of its pro-consumer agenda. Financial firms have also taken aim at Cordray.

The CFPB, an independent government agency which was created from the 2010 post-crisis act known as Dodd-Frank, is charged with making sure banks, lenders and other financial firms treat Americans fairly. It helps Americans who have problems with mortgage lenders, debt collectors, student loan lenders or credit reports.

Cordray's early exit means President Trump will be able to reshape the agency by appointing a new leader that might be more friendly to business, analysts, economists and consumer groups say.

The fear is that the CFPB, which is expected to look and run much differently under new leadership, will not back consumers with the same zeal that it did under Cordray.

"For President Trump, it will be yet another opportunity to put his stamp on a nominee who is friendlier to business and more inclined to deregulate," says Mark Hamrick, senior economic analyst at Bankrate.com. "For consumers, the risk is that they will have fewer advocates working for them in the federal government."

The agency has come under attack, including a broadside from Trump's Treasury Department. The department argued in a June report to President Trump that the CFPB was actually harming consumers, not helping them.

"The CFPB was created to pursue an important mission, but its unaccountable structure and unduly broad regulatory powers have led to regulatory abuses and excesses," the Treasury report concluded. "The CFPB’s approach to enforcement and rulemaking has hindered consumer choice and access to credit, limited innovation, and imposed undue compliance burdens, particularly on small institutions."

Cordray, a former Ohio state attorney general and treasurer, is expected to run for Ohio governor as a Democrat to replace the term-limited John Kasich. Cordray is a favorite among Ohio Democrats because of his experience running statewide campaigns.

In an interview in April with NPR, Cordray said criticism comes with the job.

"I think that if you're going after large banks and large financial companies to try to make sure people are treated fairly, you're going to make some enemies," Cordray said.

In September 2016 the CFPB hit Wells Fargo with $185 million in civil penalties to punish the bank for its fake accounts scandal. The bank agreed to pay full restitution to all victims as well as a $100 million fine to the CFPB's civil penalty fund and $85 million in other fines.

Last month, the CFPB adopted a new rule aimed at stopping payday loan abuses. The rule will make lenders that offer payday loans -- which allow workers to receive their pay more quickly but with fees and interest attached -- to first determine that the borrower can afford to repay the debt.

Consumer advocates say consumers need someone committed to putting their interests ahead of those of the banks and other financial institutions.

"Consumers will be watching closely to see whether the president will choose a CFPB director who will side with them over predatory lenders," Rachel Weintraub, legislative director and general counsel at the Consumer Federation of America, said in statement. "Consumers need a watchdog who will look out for them."

Donald Trump is a historically unpopular president, and Republicans in Congress are pushing through a remarkably unpopular agenda. Under such auspicious circumstances, it’s only natural for ardent Democrats to feel energized and empowered. Some see 2018 as their own Tea Party moment to sweep even the bluest of candidates to victory in the reddest of districts. It looks like an election Democrats can’t lose—the sort Americans haven’t seen since, well, last year.

So how can Democrats ensure that 2018 delivers the success they failed to achieve in 2016? The stakes are too high to rely entirely on one side’s enthusiasm or the other side’s disenchantment. If their overriding objective in 2018 is to save the country, not realign the Democratic Party, Democrats need to look back to the last time they won back the House in 2006. We helped coordinate that effort, and the lessons we learned then still apply today. Waves don’t happen on their own: Democrats need a strategy, an argument, and a plan for what they’ll do if they win.

In the last 60 years, control of the U.S. House of Representatives has changed hands just three times, always in midterm elections, with control shifting away from the president’s party. The 1994 and 2010 campaigns were dominated by attacks against the incumbent president and his party over health care; 2006 became a referendum over the ruling party’s incompetence and corruption. In percentage terms, the worst midterm defeat in the past century came in 1974, when a nation weary of obstruction of justice sent a quarter of the House Republican caucus packing. Some presidents are unfortunate enough to face one of these circumstances; with the midterms still more than a year away, Donald Trump already seems to have all those bases covered.

Opposition parties, by contrast, find the odds forever in their favor. In the last 20 midterm elections, the president’s party has picked up seats only twice: in 2002, when Republicans gained eight right after 9/11, and in 1998, when Democrats gained five thanks to House Republicans’ obsession with impeachment.

Trump and his party have particular reason to fear a reckoning in 2018. No first-term president has gone into a midterm this unpopular since Harry Truman lost 55 seats in the House and 12 in the Senate in 1946. Like Democrats in 1994 and 2010, Republicans in 2018 face a firestorm over health care. If Hurricane Katrina, Iraq, and the Jack Abramoff scandal dogged congressional Republicans in 2006, Trump is already torturing them with incompetence and corruption of unprecedented scale. Add potential electoral devastation to the list of Trump mistakes Republicans can’t prevent. Donald Trump came to Washington to make waves—and he may deliver a wave election powerful enough to sweep his party out of control of Congress.


Donald Trump may hand Democrats the election next year, but Democrats should strive to earn the people’s trust on their own merits anyway.

Democrats enter the cycle with a distinct advantage. For campaigners in chief, the toughest race to win is when they’re the name in voters’ sights but not the name on the ballot. Trump will be an exceptional liability on the campaign trail—determined to redeem himself, desperate for validation from his base, and toxic to every candidate in a marginal race. Trump presents vulnerable Republicans with a no-win proposition: They can’t run with him and their Democratic opponents won’t let them run without him. The last thing a majority of voters want is to give this president a blank check—or as Trump prefers to call it, loyalty.

So Democrats don’t need to spend the next year navel-gazing over how to motivate their base. In 2018, Trump will provide the greatest fundraising and get-out-the-vote machine the party has ever had. Wave elections are a chance to build on that base by winning back voters disappointed in the other side. Democrats will have plenty of disappointments to bring to their attention, including Republican health-care and tax-cut plans that betray the working-class voters who put Trump in the White House.

To pull that off, though, Democrats must channel their anger, not be defined by it. In 1994, Gingrich Republicans used an alternative agenda, the Contract with America, to take back the House for the first time in 40 years. In 1998, those same Gingrich Republicans played to their conservative base by campaigning for impeachment, producing another historic result: making Bill Clinton the first president in 176 years to gain House seats in the sixth year of his presidency. Democrats should heed that same lesson. They don’t have to make 2018 a referendum on Trump’s impeachment. If they want to win the majority they need in order to hold Trump accountable, they’ll do much better making the election a referendum on Trump’s record.

That referendum will be won or lost in swing districts—and they are much harder to find than they used to be. The Cook Political Report found that the number of swing seats—where neither party runs more than 5 points better than it does nationally—has dropped by more than half over the last 20 years, from 164 to 72. The most vulnerable seats in the current House majority belong to 23 Republican incumbents in districts Hillary Clinton carried, largely clustered in the suburbs of major metropolitan areas like Los Angeles, Philadelphia, and Washington. These districts tend to be mainstream in tone and interest. That’s a tough place to win the hand Trump has dealt Republicans of cutting student aid, denying climate change, and eliminating protections for pre-existing conditions.

But Democrats don’t just need to choose the right battles, they also need to choose credible candidates who can win them. Candidate quality may not make the difference in a place like Montana’s at-large district, where Greg Gianforte won handily just hours after assaulting a reporter. Winning hotly contested swing seats, however, requires candidates who closely match their districts—even if they don’t perfectly align with the national party’s activist base. In 2006, the Democratic base was energized and angry, but then as now, capturing a majority required winning some tough races in red and purple states across the heartland. As leaders in that 2006 effort, we recruited a football player in North Carolina, a businessman in Florida, an Iraq veteran in Pennsylvania, and a sheriff in Indiana. The Democratic Party won twice as many seats as it needed to gain control.

There’s a long-term payoff for a party that gets this right. Good candidates not only help build a wave, they help sustain it. Wave elections offer the chance to establish new beachheads in hostile territory, but it takes gifted leaders to survive when the pendulum swings back. In the 1980 Reagan landslide, Republicans gained 34 House seats—only to lose 26 seats two years later—and 12 Senate seats, only to lose 8 senators and Senate control when those seats came open six years later. With the right candidates, the impact of a wave can be felt for decades. Half a dozen “Watergate babies” elected to the House in 1974 went on to serve in the Senate. So have three Democrats who joined the House in the 2006 wave.

Even with the right candidates in the right districts, a wave won’t get far without a credible plan to address the country’s problems, not simply run attack ads against the parade of horribles from the other side. In 2006, we published a book called The Plan, which offered detailed proposals on college, retirement, health care, and the economy. One reason today’s congressional Republicans are struggling to enact an agenda is that unlike the Contract-with-America Republicans of 1994, the GOP waves of 2010 and 2014 were built only on saying no to Obama.

Donald Trump may hand Democrats the election next year, but Democrats should strive to earn the people’s trust on their own merits anyway. These are serious times for a country at the mercy of an unserious president. The damage may take years to repair, and voters deserve to know what Democrats are going to do about it.