CFPB Nomination Sparks Partisan Divisions in Senate

CFPB nomination Richard Cordray / credit: genconnect.com[/caption]

Richard Cordray’s reappointment as the director of the Consumer Financial Protection Bureau is being contested by Senate Republicans. Following a letter signed by 43 Republican Senators — led by Mitch McConnell — on February 1, Senate Democrats responded Thursday with a letter of their own after the CFPB nomination was formally nominated Wednesday. Tweet the news:

Senate Banking Committee Chairman Tim Johnson (D-SD), announced the letter, which stated:

We strongly support your decision to renominate Richard Cordray to be Director of the Consumer Financial Protection Bureau (CFPB), and pledge to do all we can to secure his confirmation without delay.  Under Director Cordray’s leadership, the CFPB has proved to be an accountable, transparent, and fair regulator, responsive to appropriate Congressional oversight.

The letter was signed by 52 Senate Democrats, as well as Angus King (I-Maine) and Bernie Sanders (I-Vermont).

Republicans are threatening the nomination in hopes of altering the structure of the Consumer Financial Protection Bureau. McConnell argued earlier this month, “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.” Tweet quote:

The letter continued by demanding a series of structural changes including: replacing the sole director with a bipartisan, 5-member board of trustees and subjecting the CFPB to an annual appropriations process (which could jeopardize future funding for the bureau). Tweet the news:

Democratic support for consumer protections was epitomized mid-week during a Senate Banking Committee hearing regarding oversight of Wall Street banks. While questioning industry regulators like SEC Chair Elisse B. Walter and Thomas Curry, Comptroller of the Currency (Cordray was also in attendance), Senator Kay Hagan (D-North Carolina) remarked:

For the U.S. housing market to continue on its path to recovery, consumers, lenders and investors need clarity regarding the boundaries of mortgage lending. The recent action by the CFPB to finalize rules implementing the ability to repay provisions of by Dodd-Frank was, I think, an important step towards certainty and access.

The disagreement concerning the CFPB’s validity cuts across almost exclusively across party lines. Only one Democrat, Mark Pryor from Arkansas, did not sign the letter. Despite Pryor’s dissent, Cordray’s appointment would be inevitable, barring a Republican filibuster.

Sensing just that, Elizabeth Warren (D-Massachusetts), Sherrod Brown (D-Ohio), and Jack Brown (D-Rhode Island) called on Republicans Wednesday to allow an up or down vote on Cordray’s appointment. Tweet at Sen. Elizabeth Warren:

Cordray was appointed to the bureau last year via a recess appointment from Obama. The constitutionality of the act is still in question and doing so again by the end of Cordray’s term this year is increasingly unlikely.

Nevertheless, Republican concerns don’t lie specifically with Cordray himself — although he is a Democrat — but with the CFPB overall. Any appointment would face unanimous opposition unless the aforementioned alterations to the Consumer Financial Protection Bureau were made first.