Kudos to President Obama for standing up for consumers today by announcing that he will make a recess appointment of former Ohio Attorney General Richard Cordray to head the new Consumer Financial Protection Bureau. The President’s action will mean that the CFPB now has all its powers to protect the public from unfair financial practices, whether by banks or other financial firms, such as payday lenders and credit bureaus.
Since July 21, the CFPB, a centerpiece of the 2010 Wall Street Reform and Consumer Protection Act introduced by our own Rep. Barney Frank, had been up and running, but only with partial powers. It’s the nation’s first federal financial regulator with only one job: protecting consumers from unfair financial practices.
With a director in place, the CFPB has the right to supervise payday lenders, mortgage companies, credit bureaus, debt collectors, private student lenders and other non-banks. It has additional supervision over banks and credit card companies, and it can finally get down to the business of truly protecting seniors, students and servicemembers as it was designed to do.
Along with civil rights, labor, senior and consumer groups, we had long-urged the Senate to confirm Cordray to direct the CFPB. Both Bay State Senators supported Cordray’s confirmation. But 45 Senators wrote a letter to the President stating that they would block confirmation of any director unless the CFPB’s independence and authority were restricted. Acting at the behest of Wall Street banks and payday lenders, 45 Senators blocked Cordray’s nomination in December.
Fortunately, President Obama will act to protect consumers and reject these outrageous demands to weaken the bureau.
Opponents were wrong to block the appointment of a well-qualified director and wrong to use the confirmation process to seek to eliminate the agency. Disagreements over the power of the CFPB should be resolved through separate legislation, not by preventing it from doing its job and leaving thousands of consumers without the protections we deserve.
The failure of the old bank regulators to stop predatory lending and other reckless Wall Street practices is widely recognized as a primary cause of the 2008 mortgage meltdown that caused the loss of millions of homes, millions of jobs and trillions of dollars in lost retirement income, all of which triggered the current recession.
The establishment of the CFPB is the most significant consumer financial protection since deposit insurance after the 1929 Great Crash. With the appointment of Cordray as its director, we finally have a dog in the fight, protecting us from unfair practices.
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Lizzi Weyant is the Staff attorney at MASSPIRG.
why didn’t he just appoint Elizabeth Warren?
NYT offers the White House’s spin:
Is here.
she knew too much.
The Republicans don’t give a rat’s ass who runs the CPFB. They couldn’t possibly care any less.
Though maybe Obama should offer to nominate Elizabeth Warren, just to mess with their heads.
Mitch McConnell doesn’t want ANYONE running it. He says the CPFB shouldn’t even exist and won’t confirm anybody until the law is changed to weaken the agency substantially. The new watchword is nullification.
I wonder what Scott Brown will do now. He was the only Republican Senator to vote in favor of Cordray last month, so he’s on the record in support of the nominee, but will probably have to stick with the R’s to oppose the timing of this recess appointment, especially if this ends up in court, per David’s intro. (Maybe now he’ll agree with you that Elizabeth Warren would make a better choice.)
Scott Brown released this statement today in support of Obama’s decision to appoint Richard Cordray to the CFPB. Link here.
He really doesn’t want any daylight between himself and Elizabeth Warren on this issue.
DADT
Cordray
He’s not as dumb as some would like to believe.
This is an epic US Senate battle and nothing should be taken for granted (e.g. nightmare/flashback – Coakley).
Warren can’t be the appointee because Obama needs her in the US Senate.
His prognostication (“I certainly wouldn’t put it past the Court to use a challenge over this appointment to effectively wipe out the power all together.”) may well be right. If so, it won’t be a coincidence that the GOP-controlled Roberts Court chooses this time and place to reduce the power of a Democratic president, and to increase the chances for gridlock between the elected branches, which increases the Court’s relative power.
Here is ThinkProgress’s take on the matter, with plenty of links from that article for further elaboration and documentation.
For what it’s worth there is also this article showing that Obama has made fewer such appointments than recent predecessors.
The Constitution clearly gives the POTUS authority to fill positions with interim appointments in vacancies existing during a Senate recess, which as the first article I link points out, is not defined by length. IMO, he absolutely needs this authority to bypass an obstinate Senate, though if a nominee is actually voted down I believe the President should respect that.
That’s really the question. Is that why the recess appointment power is in there? If so, it’s an awfully odd way to do it. If the framers wanted to give the president a way to end-run an obstinate Senate, why not simply give him one – say, an ability to make interim appointments if there’s a delay of more than x days from nomination to a confirmation vote? This business of waiting for a recess seems an awfully strange way to do it, and suggests that there was something else at work, perhaps having to do with the difficulty of traveling to and from Washington in 1789.
…but not what the framers came up with. Yes, I suspect they more assumed difficulty of conditions rather than politics, but the authority is still there. Just like the framers did not define the time for a recess to count in this context neither did they limit the reasons for using the power.
That the framers set up recess appointments because Congress would be out of session for months on end and (until recently) Presidential appointments were always been approved without controversy. Also, the reason that President Obama has been unable to implement many/any recess appointments is because a handful of republicans are tagged to hang around Washington and bring Congress to session every day so there will be no recess – which blocks President Obama from making any recess appointments.
Until today, that is, when the president declared the GOP strategy to be a sham (which it is), and made the recess appointments anyway.
Do bear in mind that the Democrats did the exact same thing during the last two years of Bush’s term, to prevent him from recess appointing a number of judges.
Which doesn’t make it less of a sham. It was a sham then and it’s still a sham.
But nice to see a little fight for a change
and the republicans did that to Clinton so it’s payback for payback (really not a way to run a country IMHO) but during those years they recessed so both Clinton and Bush were actually able to make the appointments. Bringing Congress to session for a minute and a half every day so the minority can get there way is just childish.
They’re not doing it every day; they’re doing it every three days, just like the Democrats did in 2007.
…that Sen. Brown has come out in support of Cordray’s appointment.