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Senate Democrats are united against GOP push to weaken consumer bureau

February 14, 2013|By Jim Puzzanghera
  • Consumer Financial Protection Bureau Director Richard Cordray speaks after being renominated for the position by President Obama.
Consumer Financial Protection Bureau Director Richard Cordray speaks… (Kevin Dietsch / EPA )

WASHINGTON -- Senate Democrats said Thursday they were united in opposing Republican efforts to weaken the Consumer Financial Protection Bureau, and told President Obama they supported the renomination of Richard Cordray to head the agency.

"It is time to confirm Richard Cordray as CFPB director to give the American people the protections they deserve and the marketplace the certainty it needs to help strengthen our economic recovery," Senate Banking Committee Chairman Tim Johnson (D-S.D.) told reporters.

Johnson organized a letter signed by 52 of 53 Senate Democrats and the chamber's two independents, Bernie Sanders of Vermont and Angus King of Maine, telling Obama they backed his decision to renominate Cordray and that they oppose Republican attempts to change the bureau's structure.

The only Democrat who did not sign the letter was Mark Pryor of Arkansas. But with 54 senators backing him, Cordray would have enough votes to be confirmed if Republicans allowed a vote.

Nearly all Senate Republicans, enough to mount a successful filibuster, said this month they would block the confirmation of any nominee to head the bureau unless its structure was changed.

Republicans complain that the agency, the centerpiece of the 2010 Dodd-Frank financial reform law -- is too powerful.

They want the single-director position to be replaced by a bipartisan commission. They want the bureau's funding to be part of the congressional appropriations process instead of flowing directly from the Federal Reserve.

And they want to make it easier for other banking regulators to block actions by the consumer bureau.

"Far too much power is vested in the sole CFPB director without any meaningful checks and balances," the 43 Republican senators, led by Minority Leader Mitch McConnell (R-Ky.) wrote to Obama on Feb. 3.

The same threat, issued in 2011, led Obama to install Cordray with a controversial recess appointment a year ago, along with three members of the National Labor Relations Board.

Last month, a federal appeals court ruled that Obama's NLRB appointments violated the Constitution because the Senate had not formally adjourned. The lawsuit challenging the appointments did not mention Cordray, but it is widely believed to affect his appointment.

The Obama administration is almost certain to appeal the decision to the Supreme Court.

Obama has renominated Cordray to the position in hopes of getting Senate confirmation. Cordray's recess appointment expires at the end of this year.

The court decision, which threatens to invalidate actions approved by Cordray, and the renewed filibuster threat had led to speculation that Democrats might be willing to negotiate changes to the bureau's structure.

But in Thursday's letter, Democrats said they did not intend to give in.

"As supporters of strong and effective consumer protection, we oppose efforts to weaken the CFPB through structural changes, including as the price for Senate approval of Director Cordray’s nomination," the letter said.

Sens. Jack Reed (D-R.I.) and Elizabeth Warren (D-Mass.) joined Johnson in announcing the letter and the Democrats' resolve to hold firm on the bureau's structure and Cordray's nomination.

"They want to hold up his nomination for the sole purpose of trying to weaken the agency. We've now got 54 senators saying, 'No,'" said Warren, who came up with the idea for the agency and helped launch it before being elected in November.

"American families deserve a strong watchdog, and Rich Cordray deserves a vote now," she said.

ALSO:

Court rules Obama's recess picks are illegal

Mary Jo White won't be intimidated as SEC chief, Obama says

Senate Republicans vow to block consumer bureau chief's nomination

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