WASHINGTON — Sen. Elizabeth Warren defended the Consumer Financial Protection Bureau and its director Richard Cordray during remarks at a credit union industry conference on Wednesday, urging attendees to support the agency's work too.
A battle over Cordray's confirmation is brewing in the Senate after a federal appeals court last month knocked down several recess appointments the White House made the same day it appointed Cordray, raising questions about the validity of his appointment as well.
President Obama re-nominated Cordray as director ahead of the court ruling, but Republicans have vowed to block the confirmation if the administration does not make structural changes including replacing the director with a five-person commission and subjecting it to the appropriations process.
But Warren, who founded the CFPB, said Cordray had proved himself in the job already and should be conformed immediately.
"Rich Cordray is a stellar director. He has won praise from consumer groups and industry groups — including CUNA — for his balanced rulemaking and measured approach. He has been a friend to credit unions," Warren said at a Credit Union National Association conference in Washington. "And while I know that people had concern at its outset that CFPB would be an overly aggressive regulator, I don't know how anyone could have that concern now. Rich has been providing balance, creating space for credit unions and other small financial institutions to run their businesses and serve their customers without drowning them in regulations."
Warren noted that the battle over the structure of the consumer agency was already fought leading up to the passage of the Dodd-Frank reform law, charging that the GOP's current tactics amount to holding Cordray "hostage." She then asked the credit union representatives to tell lawmakers they support Cordray's nomination while visiting Capitol Hill this week.
The Senate Banking Committee is tentatively looking at the week of March 11 for a confirmation hearing with Cordray and Mary Jo White, Obama's nominee to head the Securities and Exchange Commission, according to a Senate aide.
"Do what you can to tell your Senators and those who will listen that it's time to move on, time to stop re-litigating settled decisions, and time to confirm a director so the CFPB can create a safe harbor for your work so you can go about the business of serving your members. It's time to move forward," Warren said.
The Massachusetts Democrat also said that smaller institutions, including credit unions, were more often victims of the financial crisis, not perpetrators. The remarks came on the heels of a Senate Banking hearing Tuesday with Federal Reserve Board Chairman Ben Bernanke, in which Warren and others pressed the agency head about ending "too big to fail."
"As one Wall Street banking scandal after another has unfolded, the credit unions have been a bright spot in the financial industry. Credit unions did not break this economy," Warren said. "They did not build business models around tricking their customers. When the economy faltered, they did not turn their backs on the families and small businesses that needed them."
She added: "Credit unions that wouldn't adopt a business model based on tricks and traps were competing with slick outfits that pretended to underprice them. In other words, the game was rigged — rigged against consumers and rigged against small financial institutions."