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Consumer Bureau nominee caught in broader political fight
The nomination of Richard Cordray to become the first director of the Consumer Financial Protection Bureau (CFPB) remains bogged down in a long-running partisan fight over the broader fate of the agency.
The former Ohio attorney general appeared Tuesday before the Senate Banking Committee to discuss his nomination, but found himself largely playing a bit part in what has been a contentious fight over the agency as a whole.
In his opening statement, Sen. Richard Shelby (R-Ala.), the committee’s ranking member, only mentioned Cordray in passing and did not weigh in on his qualifications for the job. Instead, he argued the hearing was “premature” so long as the CFPB existed in its current form.
“The majority structured the bureau to grant its director unprecedented authority over the lives of the American people without any effective checks,” he said. “All of the bureau’s power is concentrated in the hands of its director.”
And Sen. Bob Corker (R-Tenn.) accused his Democratic colleagues of employing “half-truths, mistruths and untruths” in describing the GOP’s opposition to the bureau.
“I’m shocked ... to hear the spewing from almost everyone on the other side of the dais,” he said.
Forty-four Republican senators have vowed to block any nominee to head the bureau unless the director is replaced with a board, its budget is brought under the control of congressional appropriators and it is required to consider the safety and soundness of banks in creating rules.
The filibuster-proof voting bloc, if it holds firm, will have the ability to block Cordray indefinitely. Shelby said the GOP was united in its push for “reasonable changes” and called on the administration to consider them.
“Our position is clear,” he told reporters after the hearing.
Committee Chairman Tim Johnson (D-S.D.) opened the hearing by accusing the Republican minority on the panel of “playing games” with the nomination in an attempt to hogtie the bureau and re-legislating the Dodd-Frank financial reform law after failing to block it in 2008.
“This political gamesmanship is preventing Americans from receiving the consumer protections they deserve,” he said.
Sen. Sherrod Brown (D-Ohio) said the Senate’s historian told him it was unprecedented for a congressional minority to block a nominee over opposition to the broader agency’s “very existence.”
“We already had this debate once,” he said. “What kind of precedent does this set?”
Democrats on the panel were eager to list the ways the CFPB’s powers are checked. In particular, they highlighted curbs unique to the CFPB, such as the statutory cap placed on its budget and the ability of fellow regulators to overrule CFPB regulations if they deem them harmful to bank soundness.
For his part, Cordray sought to assuage GOP concerns in his testimony, emphasizing ways the bureau could actually help “honest” businesses, and downplaying heavy-handed enforcement from the bureau under his watch. He said lawsuits can be “very slow, wasteful and needlessly acrimonious” and should be used “judiciously.” Instead, he highlighted a wide range of alternatives available to the CFPB while deferring to lawmakers.
“I promise that you will have one person who will always be accountable to you for how we are carrying out the laws laid down by Congress,” he said.
While Cordray was largely caught in the middle of a partisan fight, he was pressed by Corker on how independent a regulator he could be. Noting that Cordray had mulled running for governor of Ohio as a Democrat, Corker questioned whether Cordray would try to make a name for himself at the CFPB in the pursuit of elected office. Cordray admitted he had once considered a run, but shot down those concerns.
“I have no plans to run for any political office,” he said.
A committee vote on Cordray has not yet been scheduled.
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