Battle on Cordray’s Nomination Continues Along Party Lines

Battle on Cordray’s Nomination Continues Along Party Lines

The re-nomination of Richard Cordray as Director of the Consumer Financial Protection Bureau remains a political hot button.

Cordray can be confirmed by majority vote in the Senate, but a minority of 40 Senators can block an agreement to hold the vote in the 100-member chamber.

Senate Republicans have blocked that vote on his nomination because they claim the CFPB has too much power. They want to change the structure of the consumer watchdog agency by installing a five-member board for greater transparency and accountability. They also want to subject it to annual appropriations. The White House wants the CFPB to stay an independent regulator.

A letter from 43 Republicans was sent to President Obama on February 1, saying that they would block the nomination of the CFPB nominee of any party until the accountability of the bureau is improved.

Last Thursday, a letter was sent to the President from 52 Democratic and 2 Independent Senators commending Cordray's work and calling for his re-nomination. They promised to "secure his nomination without delay."

Senator Elizabeth Warren, who helped create the CFPB as a Harvard law professor, is urging her Republican colleagues to stop filibustering and take an up-or-down vote on the re-nomination of Cordray. She is asking her network of supporters to sign a petition demanding this vote.

Changes in the CFPB may even come from the legislative branch.

Last month, a federal appeals court unanimously agreed with Republican lawmakers that the recess appointments to the National Labor Relations Board were unconstitutional. These were made on the same day—January 4, 2012—as Cordray's recess appointment to lead the CFPB. Many legal analysts believe that Cordray's appointment, if challenged, could also be struck down, as well as all the rules and enforcements enacted during his tenure. That would mean approximately $425 million of enforcement actions against deceptive marketing practices by credit card companies would be invalid. The new rules the CFPB created for the mortgage bankers to reduce risk for lenders, as well as new rules debt collectors and payday lenders, would also be invalid. This would undo a year of big accomplishments for the CFPB.

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