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GOP Raises Heat on CFPB's Cordray

Vitter questions legality of appointment, refuses to hear from head of Consumer Financial Protection Bureau

Douglas Graham/CQ Roll Call
Republicans on the Senate Banking Committee questioned Cordray, above, on Tuesday, but Vitter boycotted the session.

Republicans on the Senate Banking Committee questioned Richard Cordray, the director of the Consumer Financial Protection Bureau, on Tuesday about the agency’s data collection and offered other criticisms about the agency’s structure. But the bigger story may be in who wasn’t there for the hearing.

Sen. David Vitter, R-La., picking up on a statement by House Financial Services Chairman Jeb Hensarling, R-Texas, announced Tuesday that he had boycotted the session because, he said, Cordray’s appointment is in legal jeopardy.

“Mr. Cordray should not have testified today as if he is the legitimate director of the CFPB,” Vitter said in a statement. “Acting as such is only increasing the cloud of uncertainty around the CFPB and the economy, which is why I did not attend the hearing today.”

The Republican statements that they were taking the highly unusual step of not recognizing Cordray as director of the CFPB raises the heat on the partisan dispute over an agency created by the 2010 Dodd-Frank regulatory overhaul (PL 111-203).

Democrats at the Senate hearing said Cordray’s confirmation has been held hostage by Republicans, who opposed the creation of the CFPB and at a minimum want the director-led agency transformed into a multi-member commission.

To get around a GOP filibuster of Cordray’s nomination, launched because Republicans object to the structure of the regulatory body, President Barack Obama appointed Cordray early last year, saying that the Senate was in recess. However, other recess appointees to the National Labor Relations Board at the same time have been ruled to be unconstitutional by a D.C. circuit court. That case, which does not include Cordray’s appointment, is headed to the Supreme Court.

But Vitter’s move illustrates a deepening battle between congressional Republicans and the CFPB.

“As I have consistently stated in past hearings, we still have concerns with the structural nature of the agency,” said Sen. Michael D. Crapo of Idaho, the ranking Republican on the Banking Committee. “We continue to seek a change from the sole directorship to a board-like structure.”

“And with regard to the president’s recess appointment to the CFPB last year, my opinion has not changed,” Crapo said. “I continue to believe the recess appointment was unconstitutional.”

Other GOP senators attending and asking questions included Richard C. Shelby of Alabama, Mike Johanns of Nebraska and Jerry Moran of Kansas. Sen. Bob Corker, R-Tenn., appeared briefly just before the hearing began but did not remain.

Cordray was on the Hill to give his agency’s semiannual report to Congress, something mandated by the Dodd-Frank financial law. But the flaring of the dispute over Cordray overshadowed the work at an agency that is supposed to represent consumer interests in financial services.

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