Rich Cordray spent the past six months in the Washington, D.C., version of limbo: an unconfirmed political appointee waiting for a Senate vote on his future employment.  While he wandered around the nation’s capital trying to befriend skeptical Republicans – and wandered around the bureau’s Treasury Department offices in socks – many believed Cordray was destined to wait until November’s presidential election for a definitive up-or-down vote.

Last week, in a bit of a surprise, President Obama stuck his neck out perhaps as far as he has during his presidency, using a recess appointment to do an end-run around Senate Republicans and install the former Ohio attorney general as head of the new Consumer Financial Protection Bureau.

In an exclusive chat with msnbc.com on Monday, Cordray offered a quick view of what happens now. The bureau will immediately begin making rules for segments of the financial services industry that had previously slipped through the regulatory cracks, such as payday loans – a situation that Cordray said had created markets where “bad practices drive out the good.”  He also said that consumers who know they have a watchdog on their side will be emboldened to continue "muscling up" against companies, using blogs and social networks to join together and demand fair treatment.  The full, brief interview is below.

QUESTION: Millions of Americans say they've been cheated by the financial system, and feel that some American markets are unfair. What does Rich Cordray offer to them?

Answer: "I offer that I share their point of view that financial markets are broken in many ways and have been for long time, and it's high time we had watchdog agency to stand on their side and protect them in the marketplace -- a place where they often feel helpless and confused.

Q:  Describe two or three things American consumers might see immediately now that the bureau can begin its full operations.

A: "First, we are working to make prices and risks clearer for people, and we are working to make disclosures more simple so that consumers will be better informed, and better able to make comparisons.

“Second, now that we have full authority to level the playing field between banks and non banks, you'll see some markets that were operating in a distorted and destructive way, you'll see them begin to clean up.

“It's indisputable that some of these markets were distorted. You take a market and regulate part of it and leave the rest of it unregulated, bad practices will drive out the good. We saw that in mortgage marketplace. You'll see, with us able to police the whole market, that things will be better.

“And the third thing is that now that we have the authority to enforce the law, you're going to see institutions ... thinking more carefully about how they are treating customers, making sure that what they do is not just technically legal but also not unfair.  You'll see them asking themselves, "Is this the way you would want your own family treated in the marketplace?’"

“But there's one more piece that's interesting.  We are starting to see in these marketplaces that consumers are "muscling up." They understand that they have a voice, and that voice can matter, and they are using technology to band together and demand that they are treated better.  They will continue to do that, but having a watchdog will give them more confidence to do it in stronger and more effective ways.

Q: Can you give us -- without naming company names, if you must -- one example of an unfair practice that your bureau will be able to stop sometime soon?

A: “You will see that soon based on our actions. I'm not going to make that news today.”

Q: What does it mean to you, personally, that President Obama took the controversial step of installing you via recess appointment?

A: "It means to me that we have a responsibility to deliver for 300 million people now and we have the opportunity to do our job fully. … I feel a heavy responsibility."

While the bureau had begun work in July 2010, many of its real regulatory powers did not kick in until Cordray was installed.  Already, it had begun collecting complaints about credit card issuers and acting as an unofficial mediator between banks and account holders. It also has issued a report listing most frequent complaints. In December, it began doing the same for mortgage products.  Only days after Cordray was installed, the bureau announced it had launched “non-bank bank” oversight, including mortgage services, payday lenders, and student loan firms that don’t fall under traditional banking regulatory agencies. 

The bureau takes complaints on its Web site at ConsumerFinance.gov.

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