WASHINGTON Negotiations to move the nomination of Richard Cordray as director of the Consumer Financial Protection Bureau in the Senate have been halted, rendering this morning’s hearing on the CFPB amid mass Republican opposition bid virtually meaningless.
Republicans and Democrats are waiting to see the outcome of a court case threatening President Obama’s recess appointments last year, which could invalidate Cordray’s appointment, as well as new CFPB rules on mortgages and credit cards, Capitol Hill sources told the Credit Union Journal yesterday.
The banking committee also held a hearing last year on the Cordray nomination but a vote by the full Senate was blocked by Republicans.
Meantime, Republican senators are maintaining their opposition to the Cordray nomination until they get agreement from the President and Senate Democrats to change the structure of the fledgling agency to, among other things expand its governance from a single director to a five-member board and to give Congress direct authority over its spending, which now rests with the President. “Until key structural changes are made to the bureau to ensure accountability and transparency, I will continue my opposition to any nominee for director,” Sen. Michael Crapo, a Republican from Idaho and the ranking member on the banking committee, said yesterday in a statement.
But Senate Democrats remained committed to the structure of the year-old agency approved in the 2010 Dodd-Frank Act that created it. “There is simply no proof that structural changes to the CFPB are necessary, and demanding changes is just politics at play,” Senate Banking Committee Chairman Tim Johnson, Democrat from South Dakota, said in a statement yesterday.
But Crapo’s and his Republican colleagues’ continued opposition means that even if the banking committee votes today to endorse the Cordray nomination it is unlikely to pass the full Senate, where Republicans hold 45 votes, enough to sustain an expected filibuster. That means, Republicans could block a vote on the nomination, even though Democrats have enough votes to get the Cordray bid passed by a simple majority.
Without Senate confirmation to a five-year term Cordray’s recess appointment will expire at the end of the year, unless it is invalidated by the court before then. Cordray, the former Ohio Attorney General, may be convinced the leave before then as he is being courted by the state’s Democrats to run for Governor.
The credit union lobby has been absent from the CFPB fight, even though Massachusetts Sen. Elizabeth Warren, who helped create the CFPB before she was alected to the Senate in November, called on credit union executives at CUNA’s Government Affairs Conference last week to help persuade the Republicans to move the nomination. “We don’t get involved in nominations,” said Ryan Donovan, senior lobbyist for CUNA.
Meantime, consumer group began a campaign to persuade the Republicans to lift the blockade on the CFPB nomination. Americans for Financial Reform, a left-leaning group, began a petition drive aimed at moving the Cordray nomination, and Consumers Union, one of the biggest consumer lobby groups, called on the banking committee to swiftly move the Cordray nomination to a vote by the full Senate.
