Hostage Takers Not Budging: No on Cordray Nomination Again
The 44 Republican Senators who are continuing to hold former Ohio attorney general Richard Cordray's confirmation as Director of the Consumer Financial Protection Bureau (CFPB) hostage are not negotiating. Although the CFPB has been up and running since July 21, 2011, bipartisan fighting has been going on for much longer, and seems likely to continue. In September the Senate blocked Cordray’s confirmation, and last week most Republican senators, including Illinois Senator Mark Kirk, blocked it again in a 53-45 vote.
Without a director, the CFPB cannot "exercise its full power" and fully protect American consumers from predatory lenders and other fraudulent financial products. These Republicans know it and are taking advantage of this fact. Unless and until a director is confirmed the CFPB is not able to:
- prohibit unfair, deceptive, or abusive acts;
- write rules related to model credit disclosure forms;
- define which larger non-bank financial institutions should be supervised by the agency; and
- examine or enforce laws against non-bank financial institutions such as all mortgage-related businesses, along with payday lenders, student lenders and other large non-bank financial companies.
But some legislators are insisting that the bureau first be stripped of its independence and be subject to an annual budget process sensitive to financial industry influence that is sure to slash its ability to effectively protect consumers from unsafe products and practices. Many of these senators are the same ones who send a letter refusing to confirm any nominee, regardless of his or her qualifications, unless the structure of the CFPB is changed to disperse its power and weaken its director’s role. Specifically, the letter demanded that instead of a single director there should be a board overseeing the CFPB, the CFPB should be subject to the Congressional appropriations process, and that there should be a safety-and-soundness check by the prudential financial regulators, who oversee the safety and soundness of financial institutions, on any regulations issued by the CFPB. These are the same restrictions that conservatives had originally wanted in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), but were unable to get passed.
In mid-October, a group of 37 bipartisan attorneys general came together to support Cordray’s nomination, and they confirmed their support right before yesterday’s vote. Although they do not all agree on the Dodd-Frank Act, they do believe that Cordray is highly qualified to serve as the director of the CFPB. Moreover, they indicated that coordination between the attorneys general and the federal government is critical, a point driven home by the economic injustice protests around the country. Twenty-seven Democratic members of the House Financial Services Committee also released a letter sent to Senate Minority Leader Mitch McConnell (R-KY) calling for him to agree to a vote of the full Senate on the nomination of Cordray as Director of the CFPB. Other groups, such as the American Sustainable Business Council (ASBC), a growing coalition of responsible and sustainable businesses that sent a letter to the full Senate on behalf of more than a hundred businesses and business networks, have also called for the rapid confirmation of Cordray.
Before the vote was scheduled, Sen. Scott Brown (R-MA) also broke from his party to endorse Cordray. This is not the first time Sen. Brown has made a break from party lines; he also broke with his party on the Dodd-Frank Act vote, and his vote (one of just three Republican votes) helped push it through. He did withhold his vote, however, until he had secured highly targeted legislative favors for hometown banking giant State Street.
Thus, it is not necessarily impossible that that some senators may change their minds. As the House letter to McConnell said, it is “unfathomable that any federal legislator would stand in the way of ensuring comprehensive protections for military families, the elderly and all Americans.” But, so far, this is exactly what is happening, and Cordray’s nomination is still being held hostage.
