It’s a new year and a new era for consumer protection. Last week, President Obama appointed former Ohio Attorney General Richard Cordray as the director of the newly created Consumer Financial Protection Bureau (CFPB). This recess appointment not only gives the CFPB all its powers to protect American consumers from abusive and unfair financial practices, whether by banks or other financial firms like payday lenders, but it also distances Obama from an unpopular Congress. The President has been pressing the Senate for months to confirm Cordray, only to be blocked by big banks and their allies in Congress. These opponents in Congress vowed to contest any confirmation of the director position until structural changes are made at the Bureau including eliminating the Director position and creating an oversight board instead. Over the holidays, Congress was kept from officially going on break in order to prevent the president from making recess appointments.
When the President found a way around these tactics, some members of Congress claimed Obama’s appointment wasn’t legitimate. Senate minority leader, Mitch McConnell, denounced the appointment stating that Mr. Obama had “arrogantly circumvented the American people” and endangered “the Congress’s role in providing a check on the excesses of the executive branch.” Not surprising the banking industry agrees. According to Politico, in an email to members, David H. Stevens, president and CEO of the Mortgage Bankers Association, warned that Cordray’s appointment will escalate hostilities between the White House and the GOP, resulting in more legislative gridlock.
Richard Cordray doesn’t appear to be interested in these partisan games. He defends his appointment as legitimate and believes it will withstand any possible legal challenges. In a recent event at the Brookings Institute, he promised he would work with all members of Congress and emphasized that they all share the same goal of serving the American people. “We really have the same issues at heart. I intend to build that relationship with Congress,” Cordray said, adding that the CFPB is highly popular with the public and already is planning actions that will demonstrate why its authority is justified.
NACA applauds the bold recess appointment of Richard Cordray. The CFPB can now begin the new year with even bolder actions to better protect American families. To view a video message from Cordray on his new position as Director of the CFPB, click here.
Written By: Ellen Taverna, Legislative Associate, National Association of Consumer Advocates