WASHINGTON In an unprecedented rebuff, the Republican chairman of the House Financial Services Committee refused to allow Consumer Financial Protection Bureau Director Richard Cordray to testify before the committee because he said a recent court ruling invalidates Cordray’s year-old appointment to the post.
Rep. Jeb Hensarling, R-Texas, an ardent opponent of the CFPB, said last night the panel will not accept testimony from Cordray on the agency's semi-annual report, arguing that Cordray was not legally appointed to the position.
The unprecedented snub comes as Cordray is scheduled to testify this morning before the Senate Banking Committee.
A federal appeals court in January invalidated several recess appointments President Obama made to the National Labor Relations Board on the same day Cordray was appointed as the head of the CFPB. Cordray was not involved in the lawsuit, but the court decision has raised numerous, ongoing questions about the legality of his position. Senate Republicans are pushing for several key changes to the agency in exchange for a Cordray confirmation vote, including establishing a bipartisan commission structure at the agency and direct congressional oversight of funding, which is now provided by the Federal Reserve.
Republican Senators have pledged to block Cordray’s nomination to a full five-year term as CFPB director until President Obama and Senate Democrats agree to their demands.
Building on the controversy, Hensarling is now arguing that the banking panel "cannot legally accept testimony" from Cordray on the agency's semi-annual report to Congress because of the uncertainty over his position. The CFPB issued its report late last month.
"The court's unanimous ruling makes it clear that there is no legally-appointed director of the CFPB at this time," said Hensarling. "By law, the committee can receive this testimony only from a director who is appointed in accordance with the Constitution and the Dodd-Frank Act, which created the bureau."
“Absent contrary guidance from the United States Supreme Court, you do not meet the statutory requirements of a validly-serving director of the CFPB, and cannot be recognized as such,” Hensarling wrote in a letter to Cordray. “Chairman Hensarling and many others in Congress have sought to make changes to the CFPB’s structure that would make the bureau accountable.”
