Senate Republicans say they once again have the votes to block President Barack Obama’s pick to head the Consumer Financial Protection Bureau.
In a letter to President Barack Obama on Friday, 43 GOP senators vowed to block the recent nomination of Richard Cordray to direct the Consumer Financial Protection Bureau. After Republicans filibustered Cordray’s nomination in December 2011, Obama made Cordray a recess appointee in early 2012; that appointment expires at the end of this year, and Obama wants him confirmed for a full five-year term.
Republicans however, wrote they will oppose Cordray or any other nominee absent major structural changes to the bureau, which was established by the 2010 Dodd-Frank law to protect borrowers seeking mortgages and credit cards. With solid GOP opposition, Democrats would be unable to overcome a filibuster to confirm Cordray.
White House Press Secretary Jay Carney told reporters he was not aware of the letter, but blasted Republicans for their continued opposition to the bureau and the law that created it.
“It is most unfortunate that, you know, a minority of the U.S. Senate continues to oppose implementation of Wall Street reform that was designed entirely to protect the American taxpayer from the kind of crisis that we saw engendered by the collapse of our financial sector in 2007 and 2008,” Carney said.
The letter is not a surprise, as nearly the entire Senate GOP conference sent a similar letter in May 2011. The Republican demands remain the same. They want to replace the director-led bureau with a five-person commission; subject the agency to the congressional appropriations process instead of letting it receive funds from the Federal Reserve; and make it easier for other banking regulators to overrule the bureau.
“As presently organized, the CFPB is insulated from congressional oversight of its actions and its budget. Far too much power is vested in the sole CFPB director without any meaningful checks and balances,” the senators wrote in Friday’s letter. “We believe these are commonsense reforms that Congress can promptly adopt on a bipartisan basis.”
The letter was crafted by Senate Minority Leader Mitch McConnell of Kentucky and Sen. Michael D. Crapo of Idaho, the top Republican on the Senate Banking, Housing and Urban Affairs Committee.
Sen. Jerry Moran, R-Kansas, has introduced a bill (S 205) to make the changes, and House Republicans have pledged to advance similar legislation. The GOP-controlled House passed a bill to restructure the consumer bureau in 2011, but it died in the Democrat-led Senate.
Democrats reject the proposals, saying they are intended to weaken an agency that Republicans have long opposed.
“The CFPB enjoys overwhelming public support, and there is no evidence that the bureau is unaccountable and that structural changes are necessary,” said Senate Banking Chairman Tim Johnson, D-S.D. “Calls for changes to the CFPB are just politics at play. The market needs certainty, and blocking Richard Cordray’s nomination is a disservice to consumers and industry alike.”
Carney said Obama would not accept the GOP changes and said the backing of a majority of senators should lead to Cordray’s confirmation.
“The president urges the Senate to confirm Richard Cordray to the head of the bureau,” Carney said. “As the letter you cited demonstrates, he has substantially — substantially more than a majority of support within the U.S. Senate. That should surely be enough for confirmation.”
Complicating Cordray’s path to confirmation and potentially giving momentum to GOP calls for an overhaul was a decision made last week by the U.S. Court of Appeals for the D.C. Circuit, which ruled that the recess appointments of three National Labor Relations Board members were unconstitutional. Cordray’s appointment was made at the same time, although the court did not address it. His appointment is being challenged in a separate case.
For now, Democrats are resisting changes to the bureau, preferring to wait and see if the court’s decision is ultimately upheld.
In the meantime, Republicans will continue their criticism of the agency. Sen. Mike Johanns, a Nebraska Republican who sits on the Banking panel, introduced legislation (S 190) on Thursday to bar the transfer of Fed funds to the bureau to carry out any activity that hinges upon confirmation of a director.