Second CFPB Fight May Be Just as Contentious as First
After President Obama reintroduced Richard Cordray as the long-term head of the Consumer Finance Protection Bureau yesterday, many were still calling for restructuring.
Insurance Networking News, January 25, 2013
Here we go again.
Richard Cordray was reintroduced Thursday as the administration's long-term choice to run the Consumer Financial Protection Bureau, but huge questions remain over whether his second nomination for the job is any more likely to be approved than his first.
Immediately out of the gate, Republican leaders — still fuming over Cordray's recess appointment a year ago — challenged the move. Their position appears identical to when, in May 2011, Republicans mounted a campaign to block any potential director to run the bureau — including both Cordray and CFPB-architect Elizabeth Warren — unless the administration supported reforms to its structure. Those included establishing a commission to run the agency.
"Today's decision to renominate Richard Cordray to be Director of the Consumer Financial Protection Bureau after using an unconstitutional recess appointment is premature, given the outstanding concerns about the bureau and the legal challenge to the recess appointment," Sen. Michael Crapo, R-Idaho, the new ranking member on the Banking Committee, said just moments after Cordray's re-nomination was announced. (President Obama also announced the nomination of former prosecutor Mary Jo White to head the Securities and Exchange Commission.)
"Until key structural changes are made to the bureau to ensure accountability and transparency," Crapo added, "I will continue my opposition to any nominee for director … If the president is looking for a different outcome, the administration should use this as an opportunity to work with us on the critical reforms we have identified to him."
House Financial Services Committee Chairman Jeb Hensarling, R-Texas, echoed that sentiment, saying he hoped "the decision to re-nominate Mr. Cordray will open the debate about whether some common sense checks and balances will be placed on a massive bureaucracy that is now totally unaccountable to the American people."
Still, some believe Cordray's renomination for the job may draw more support than the administration's first attempt to get him confirmed in 2011, with a few political factors changed and positive reviews of Cordray's performance since he was installed a year ago through a controversial recess appointment.
"It's a new day," said Camden Fine, president and chief executive officer of the Independent Community Bankers of America. "I don't think this is going to be a walk in the park, but I certainly think that Mr. Cordray will get a fair hearing. I don't think that the criticism will be as harsh as it was last time around."
To many, the nomination was surprising. Cordray had given numerous signals he was not interested in a long-term slot and wanted to return to Ohio — where he was the attorney general — after his recess appointment expires at the end of this year to run for governor. Focus instead had shifted to who would succeed the outgoing Raj Date as the CFPB's deputy director. (By statute, the agency's No. 2, who does not need Senate confirmation, would automatically become the bureau's interim leader after Cordray's recess appointment expires.)
But some said his renomination may reflect Cordray's desire to make a more lasting imprint on the still-young agency.
"I wasn't sure he wanted to stay in Washington" but "he may feel that since he started the job that he wants to see it through," said Jeffrey Taft, a partner at Mayer Brown. "He was responsible for getting the agency going, and now he can try to leave a lasting mark."
In his press conference, Obama said Cordray has "proven to be a champion of American consumers."
"Richard has earned a reputation as a straight shooter and somebody who is willing to bring every voice to the table in order to do what's right for consumers and for our economy," Obama said, adding that the Senate should confirm both nominees as early as possible. "Richard's appointment runs out at the end of the year and he can't stay on the job unless the Senate finally gives him the vote he deserves. There's absolutely no excuse for the Senate to wait any longer to confirm him."
Republicans in the Senate still control enough seats to stop any nomination, but Democrats did gain two seats — including the one now occupied by Warren, who will sit on the Banking Committee. Meanwhile, it is unclear exactly how aggressive Crapo intends to be, whereas his predecessor as the panel's ranking member, Alabama's Richard Shelby, has been one of the bureau's most vocal opponents.
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