WASHINGTON Republican senators on Friday filed a bill that would block the Consumer Financial Protection Bureau from enforcing or implementing a host of new mortgage and credit card regulations until a new director is confirmed by the Senate intensifying the chess game over the fledgling consumer agency.
Though the bill filed by Sens. John Cornyn, R-Texas, Mike Johanns, R-Neb., and Lamar Alexander R-Tenn., has virtually no chance of passing the Democrat-controlled Senate, it makes it clear the Republicans will not vote to confirm current CFPB Director Richard Cordray to a full five-year term until President Obama and the Democrats in the Senate agree to their demands to reform the year-old agency if they want to prevent gridlock on new consumer rules.
The latest GOP maneuver comes after a federal appeals court invalidated three recess appointments President Obama made to the National Labor Relations Board the same time last year he named Cordray as a recess appointment to direct the CFPB, meaning according to the Republicans Cordray’s appointment is also voided. The senators have called on Cordray and the three labor appointments to resign immediately.
Meantime, all 43 Republicans in the Senate told President Obama in a letter Friday they will not vote to confirm Cordray to a full term until the president agrees to their demands to change the structure of the new agency to have it headed by a five-person board instead of a single director and to give Congress greater control over the agency’s budget, which currently is funded through the Federal Reserve.
The Republicans adopted the same stance last year but they were thwarted when the president appointed Cordray to the post during a brief respite in Senate business, which the Obama administration defined as a “recess.” Republicans insisted it was not an official “recess” because they maintained a single senator in a so-called pro forma session when no Senate business occurred, simply to prevent recess appointments.
Credit union observers said the current stalemate increases the likelihood that some kind of deal will have to be struck to break the gridlock. “There are just so many scenarios that can unfold, but some kind of grand bargain will need to occur...maybe multiple nominations combined with a structural change to the CFPB with a three-to-five-person board or commission or nothing occurs based on the recent court finding,” said Dan Berger, chief lobbyist for NAFCU, which supports the creation of a bipartisan board to oversee the CFPB.
