WASHINGTON — Republican Sens. Mike Johanns of Nebraska, Lamar Alexander of Tennessee and John Cornyn of Texas have introduced legislation that would halt certain work at the Consumer Financial Protection Bureau until the agency confirms a director.
The Restoring the Constitutional Balance of Power Act, introduced Thursday, follows a key federal appeals court ruling last week against the recess appointments of three members of the National Labor Relations Board. That decision casts into doubt the legality of CFPB Director Richard Cordray's appointment because it occurred on the same day as the others, even though he was not directly involved in the lawsuit.
President Obama, meanwhile, re-nominated Cordray to serve as director ahead of the court decision, but it's unclear if the agency head will be able to survive the Senate confirmation process amidst legal uncertainty and ongoing political battles about the structure of the bureau. Senate Republicans have repeatedly said they will oppose Cordray's appointment unless Democrats agree to several major changes at the agency: they want the bureau to establish a five-person commission instead of a single director, subject the agency to the appropriations process and give other banking regulators more discretion to overrule its decisions.
"In terms of the consumer bureau, here's what I'm asking. I'm just asking the President to sit down with us and work through these issues," Johanns told reporters on Thursday. "They're legitimate; they're fair issues. We have a constitutional right here that's involved. We have a right to say under 'advise and consent' that we have concerns, and I don't think we should be blown off."
The new legislation would halt the transfer of funds from the Federal Reserve for any actions, including implementing rules, that require the approval of a director.
Johanns also spoke to the cloud of uncertainty now hanging over the bureau in the wake of the NLRB decision regarding rules that the CFPB has already promulgated under Cordray.
"Any action that has required the director is going to be illegal, and that's a problem because he's been a busy man. He's been issuing rules and regulations, so they've got a very serious problem," he said.