Christian
Science Monitor...
Recess
appointee Richard Cordray ready
to ‘prove’ worth of consumer bureau
By David Grant
January 5, 2012
WASHINGTON
- No matter how Richard
Cordray was appointed, he believes Americans will support him and the
federal
government’s Consumer Financial Protection Bureau (CFPB) when they
begin to see
the fruits of its labor.
“The
most important thing we can do as
a bureau is keep our nose to the grindstone and keep doing our work,”
Mr.
Cordray, CFPB director and former head of its enforcement division,
said
Thursday during a public appearance in Washington. “As we attack this
problem,
as we offer a solution or an improvement for that problem, we will
prove our
own case both to the people who represent the public and the public at
large.”
President
Obama, using a recess
appointment to get around Senate objections, installed Cordray atop the
CFPB on
Wednesday. Republican senators had blocked the appointment since Mr.
Obama
nominated Cordray, a former Ohio attorney general, for the post in
July.
Republicans have balked at confirming anyone for the CFPB’s top job,
citing
concerns about lack of congressional oversight of the bureau’s
operations and
funding.
Obama’s
recess appointment drew fire
from many conservatives, who said the Senate was not in fact in recess
on
Wednesday. House Speaker John Boehner called Obama’s move an
“extraordinary and
entirely unprecedented power grab.”
Cordray
spent part of his first day on
the job speaking at the Brookings Institution, where he characterized
the
CFPB’s chief responsibility as clarifying financial products and
services aimed
at consumers, to avoid crises like the subprime mortgage debacle.
“The
single event that has limited
credit most substantially for Americans in my lifetime is the financial
crisis
of 2008 and 2009,” said Cordray. “That meltdown was caused, in turn, by
some of
these problems and failing to regulate parts of markets.”
With
Cordray now at the helm, the CFPB
can begin addressing some of these unregulated markets.
While
the CFPB has been at work for
more than a year, its operations were limited to larger banking
institutions
until its director was in place, under stipulations in the Dodd-Frank
financial
regulatory reform law. Cordray’s arrival allows the CFPB to begin
oversight of
nonbanks, including payday lenders, mortgage servicers and originators,
and
private purveyors of student loans, among others.
These
groups are key players in the
consumer finance world because of their reach – 20 million American
households
use payday lenders, according to Cordray – and because “they have
largely
escaped any meaningful federal oversight” even though they typically
compete
with banks.
Cordray’s
plans for the CFPB come amid
strident criticism of the manner of his appointment.
Republicans
were almost unanimous in
their disdain for the president’s maneuver. Senate minority leader
Mitch
McConnell (R) of Kentucky objected to the move on constitutional
grounds,
saying it “fundamentally endangers” Congress’s ability to check the
power of
the president.
In
terms of the appointment’s
constitutionality, appointing the CFPB director Wednesday rather than
Tuesday
may matter. On Tuesday, the Senate was technically in recess. But Obama
acted
on Wednesday to gain an additional year of Cordray’s service atop the
CFPB:
Because recess appointees serve until the end of the “next session” of
Congress, Cordray may be able to serve through 2013.
One
GOP voice raised in support of
Cordray was Sen. Scott Brown of Massachusetts. Senator Brown, who faces
a tough
reelection battle with putative Democratic opponent Elizabath Warren,
has
tacked toward the political center on several issues to woo voters in
the
liberal-leaning Bay State.
“I
support President Obama’s
appointment today of Richard Cordray to head the CFPB,” Brown said in a
statement Wednesday. “I believe he is the right person to lead the
agency and
help protect consumers from fraud and scams. While I would have
strongly
preferred that it go through the normal confirmation process,
unfortunately the
system is completely broken.”
Ms.
Warren launched the CFPB and
initially led it, but Obama did not nominate her to be its permanent
director.
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