Obama Expected to Appoint Consumer Financial Protection Bureau Chief

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President Obama is reportedly planning to name Richard Cordray as director of the Consumer Financial Protection Bureau in a recess appointment today, which means the drawn-out Congressional standoff over Cordray’s nomination to head the watchdog agency may be drawing to a close.

Last year, 45 Senate Republicans blocked a procedural vote that would have allowed a majority to approve Cordray’s nomination because they objected to the structure of the CFPB and feared it would have too much power. But with Congress not in session, President Obama is using this as an opportunity to bypass Senate confirmation, which will surely anger Republicans but allow the president to install Cordray, something he’s been trying to do for months.

“With a director finally in place and no question about its powers, the Consumer Financial Protection Bureau can start scrutinizing unfair practices by debt collectors, mortgage brokers, credit reporting agencies, and predatory payday lenders,” Lauren Saunders, managing attorney at nonprofit group the National Consumer Law Center, said in a statement. With a director, the CFPB will have full authority to police nonbank financial service providers like credit reporting agencies and private student loan companies.

(MORE: The 3 Silliest Remarks From the Senate’s Cordray Hearing)

Even without a director, the CFPB has been able to get some tasks accomplished. It collected and evaluated consumers’ complaints about credit card companies and is developing model disclosure boxes for credit cards and mortgages that spell out fees and costs borrowers will incur. (A version of a similar form for checking accounts, created by the Pew Charitable Trusts, was recently adopted by Chase for its basic checking account.) It’s also tackling abuses in student lending and in financial products that target military service members.

Bloomberg, which cited unnamed sources when reporting that President Obama is considering a recess appointment, says the White House is steeling itself for a court battle with Republicans over the nomination. Recess appointments are nothing out of the ordinary; George W. Bush made 171 during his time in office, 99 of which were for full-time positions, according to Senate data.

(MORE: New CFPB Thinks Credit Scoring is Confusing, Too)

What’s different now is that Republican lawmakers have been keeping Congress technically in session, in name only, specifically to prevent the president from making recess appointments. On Tuesday, for instance, the Senate held a 32-second “session,” according to the Washington Post. Obviously, they didn’t do any lawmaking work during that brief time.

Whether or not the White House is right or wrong will probably eventually be up to a court (or several courts) to decide. But consumer advocates say the implementation of a director for the CFPB is a huge step forward in protecting consumers from abuses practiced by financial institutions.

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