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Cleveland Plain Dealer...
Richard Cordray caught in the middle as GOP, Obama wrestle over Consumer Financial Protection Bureau
By Stephen Koff, The Plain Dealer
Tuesday, July 19, 2011
WASHINGTON --- Former Ohio Attorney General Richard Cordray appears
caught in a political no-man’s land only hours after his nomination as
the nation’s new consumer-lending cop.
President Barack Obama, standing alongside Cordray, 52 in the White
House Rose Garden, vowed Monday to fight for his confirmation to head
the new Consumer Financial Protection Bureau .
Senate Republicans vowed to block him.
“I think that it doesn’t matter who you nominate for this particular
position,” said Paul Light, a New York University professor who has
advised many in Washington on governance. “It could be Superman, the
Green Hornet, a great American hero. This nomination is not going to go
forward.”
This doesn’t mean that Cordray’s new job is over before it even begins.
But U.S. Rep. Barney Frank of Massachusetts, Light and other say it
will require a move known as a recess appointment. Obama would have to
wait until the Senate takes a recess -- the next one scheduled is in
August, although opposition lawmakers could play havoc with the
schedule to avoid this very process -- and appoint Cordray on a
temporary basis. That would put Cordray in his new job until the end of
2012, practically the end of Obama’s current term
“Since they’ve announced they won’t confirm anybody, the president has
no option but to make a recess appointment,” said Frank, who authored
financial reforms that created the consumer bureau.
The problem isn’t Cordray specifically.
It’s that all but three Senate Republicans object to the new agency’s
broad scope over lending for homes, credit cards and other financial
products.
Congress last year, led by Democrats, created the consumer agency to
clamp down on predatory practices that left some Americans in
foreclosure and others struggling to pay loans whose complex terms,
often explained in near-microscopic type, allowed their interest rates
to balloon.
The agency is set to open for business on Thursday.
Cordray was initially appointed as its enforcement chief while a
presidential executive assistant, Harvard law professor Elizabeth
Warren, set up the agency. But Warren was a lightening rod for critics,
with many considering her too liberal and outspoken to win confirmation
to head the agency, so Obama tapped Cordray on Sunday. He said that
Warren specifically recommended Cordray.
Cordray became Ohio’s attorney general after a special election in
2008, filling the slot after its former occupant, Marc Dann, left in a
sexual harrassment scandal. Cordray served until the end of 2010 but
lost reelection to Mike DeWine.
“Rich helped recover billions of dollars in things like pension funds
on behalf of retirees and stepped up the state’s efforts against
unscrupulous lending practices,” the president said Monday. “He’s also
served as Ohio’s treasurer and has successfully worked with people
across the ideological spectrum, Democrats and Republicans, banks and
consumer advocates.”
Furthermore, Cordray is a five-time ‘Jeopardy’ champion. “That’s why
all his answers at his confirmation hearings will be in the form of a
question,” Obama joked.
Senate banking committee chairman Tim Johnson of South Dakota said he
wants to hold a confirmation hearing on Cordray quickly. A simple
hearing won’t require a vote.
But confirmation will. And Republicans say they will refuse to confirm
Cordray unless the agency undergoes dramatic change, which Obama
opposes. Republicans say the fledgling agency will have too much
unchecked authority.
The GOP-led House is scheduled to vote this week to dilute the new
director’s power by installing a five-member panel instead of a single
bureau chief. Democrats can block the measure in the Senate, where they
have a majority, but they lack the 60 votes needed to bring Cordray’s
nomination to full consideration.
“We have no doubt that, without proper oversight, the CFPB will only
multiply the kind of countless burdensome regulations that are holding
our economy back right now, and that it will have countless unintended
consequences for individuals and small businesses that constrict
credit, stifle growth, and destroy jobs,” Senate Republican leader
Mitch McConnell of Kentucky said Monday. “That’s why everybody from
florists to community bankers opposed its creation.”
Forty-four Republicans signed a letter in May saying they would not
confirm a director until fundamental changes are made. Ohio’s Rob
Portman was among them. Senate leaders said Monday that they are not
backing down.
In the meantime, Warren is still a special assistant and Geithner has
the ultimate authority over the new agency, an administration source
said.
As for Cordray, who declined through intermediaries to comment Monday,
he’ll continue in his current job -- chief of enforcement for an agency
with a director in waiting.
Read it at the Cleveland Plain Dealer
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