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Why The Appointment Of Richard Cordray Is A Victory For Middle Class Families

Why The Appointment Of Richard Cordray Is A Victory For Middle Class Families

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  • Advocacy Team

Nearly 18 months after the passage of the Dodd-Frank Wall Street Reform Act created the Consumer Financial Protection Bureau (CFPB), the agency will finally have its first director. That’s because President Obama, using his power to make appointments during a congressional recess, announced today that he was appointing former Ohio Attorney General Richard Cordray — whom the administration formally nominated in July — as the CFPB’s director. Obama also appointed three members to the National Labor Relations Board, another agency opposed by the GOP. These appointments were victories for progressives, who have spent months urging the administration to use its recess appointment powers to fill the seat, and for America, which will benefit from the fact that two important agencies will be able to function properly because of Obama’s action.

CONSERVATIVE REACTION: ThinkProgress first reported that Obama would appoint Cordray this week, and after the White House confirmed that report this morning, Republicans immediately began blasting the president’s “power grab.” Senate Minority Leader Mitch McConnell (R-KY) called Obama’s move “unprecedented,” saying it “arrogantly circumvented the American people.” House Speaker John Boehner (R-OH) said Obama had made an “extraordinary and entirely unprecedented power grab,” and House Financial Services Committee Chairman Spencer Bachus (R-AL) said Obama “delegitimized the CFPB and has opened the agency up to legitimate legal challenges that will cripple it for years.”

WHY THEY ARE WRONG: As ThinkProgress’ Ian Millhiser noted this week, Obama is well within his legal right to appoint Cordray during Congress’ current recess — which has lasted since December 23 for constitutional purposes. Past presidents have invoked the recess power during much shorter Senate breaks. In 1903, in fact, President Theodore Roosevelt made more than 160 recess appointments during a recess that lasted less than one day, and President Harry Truman made similar appointments. Conservative hero Ronald Reagan, meanwhile, averaged three times as many recess appointments as Obama each year, making 243 total over his time in office. If anything represents an “unprecedented power grab,” it is the rate of the McConnell-led GOP’s obstructionism. As Millhiser notes, filibusters have increased two-fold since Obama took office, and a large number of votes never occur because of the GOP’s threats to filibuster.

WHY IT’S IMPORTANT: While the CFPB, the brainchild of current Massachusetts Senate candidate Elizabeth Warren (D), has been functioning since Dodd-Frank passed, having its first director will allow the agency to develop and grow into a true vehicle of protection for consumers against predatory Wall Street banks and other financial institutions. Without a director, the CFPB’s ability to prohibit unfair, deceptive or abusive financial practices was limited. Specifically, it was unable to use its authority to oversee non-bank financial institutions like certain mortgage lenders who target vulnerable consumers, check cashers, and payday lenders. Warren was the first choice of many progressives, but Cordray himself is eminently qualified to hold the position — so qualified, in fact, that one attorney who represents the financial industry said Cordray “frightens me the most.” Before he lost his bid for re-election in 2010, Cordray was at the forefront of the foreclosure fraud scandal and was the first state AG to sue a mortgage lender over fraudulent practices. As attorney general, he led efforts to rein in payday lenders. As for the CFPB, it will be tasked with overseeing lenders and financial institutions to prevent the types of predatory practices — like foreclosure fraud, discriminatory mortgage lending, and practices from payday, student loan, and credit card lenders — that cheated and defrauded the American people before and through the recession.

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Authors

Advocacy Team