Republicans in Congress are pulling out all the stops to make sure that Richard Cordray is not confirmed to continue as Director of the Consumer Finance Protection Bureau (CFPB) and, indeed, that the Bureau is not allow to exist in its present form.
Cordray currently serves as director through an interim presidential appointment in January 2012 after Republican senators made it clear they would not confirm Cordray or anyone else to the position. They admitted they had no objections to the qualifications of Cordray or of Elizabeth Warren, the President's supposed first pick for the position, but to the existence of the Bureau itself. Cordray's interim appointment is expiring and President Obama has nominated him for a regular appointment.
Representative Jeb Hensarling (R-TX), Chairman of the House Financial Services Committee sent a letter to Federal Reserve Board Chairman Ben Bernanke regarding the legality of a recent infusion of funds to the Bureau. The Dodd-Frank Wall Street Reform and Consumer Protection Act set up the CFPB to receive its monies directly from the Federal Reserve to insure its independence from Congress. The letter is based on questions about the validity of Cordray's original appointment because of a recent Appeals Court decision which invalidated the appointments of three members of the National Labor Relations Board made on the same day, also to circumvent the senate's refusal to confirm any nominees for the positions.
Hensarling asks the Board of Governors of the Federal Reserve to clarify the transfer of funds to the CFPB following that court decision on the basis that he anticipates "a federal court will soon reach a similar conclusion with respect to the validity of Mr. Cordray's appointment."
The representative states that Dodd-Frank "authorizes the Board to transfer funds to carry out the authorities of the CFPB only at the request of its director. Because it appears there is not presently a validly appointed director of the CFPB, I question the circumstances under which the Board may lawfully fund the CFPB's operations."
Meanwhile, over in the Senate confirmation hearings on Cordray were scheduled today before the Senate Banking Committee despite a pledge by 43 Republican senators to block his confirmation unless structural changes are made to the Bureau including placing it under the control of a bipartisan commission and submitting its budget to the congressional appropriations process. Forty-three votes are enough to block closure and prevent an up or down vote on the nomination.
In his written testimony prepared for his confirmation hearing Cordray said his approach to the role of Director is deeply informed by more than two decades in public service. In his career as a county tax collector, Ohio State Treasurer and Attorney General he said he found "that law enforcement which is evenhanded, fair, and reasonable not only protects consumers, but also supports what I call the honest businesses in two key ways. First, the businesses that cheat can gain a significant and unfair advantage, and law enforcement protects honest businesses against the cheaters. Second, keeping the marketplace clean ensures consumers are treated fairly and gives them confidence they need to participate in that market."
Cordray outlined what the Bureau has done in its two years of operation in the areas of mortgages, student loans, credit cards, consumer education, and responding to consumer complaints but said there is much more to be done in each of those areas. "Our essential work is to serve and protect consumers - our mothers and fathers, sisters and brothers, sons and daughters - all the people of this country who rely every day on the markets for consumer finance. They deserve a fair shake, and they deserve to have this agency standing on their side to make sure they are treated fairly."
"As the economy recovers, we want people to know they now have a new agency standing on their side, looking out for their interests, to help restore their confidence in the consumer financial marketplace," Cordray said.
