Cordray Is Not The Real CFPB Director According To Committee Chair

by devteam April 23rd, 2013 | Share

Jeb Hensarling (R-TX), Chairman of the House Financial Services Committee announced yesterday that the committee would not be accepting testimony from Richard Cordray, Director of the Consumer Financial Protection Bureau (CFPB) on the Bureau’s semi-annual report “until he is validly appointed as the bureau’s director.”</p

The decision, published on the committee’s website, was memorialized in a letter from Hensarling to Meredith Fuchs, the CFPB’s associate director and general counsel.  The letter said the Committee “stands ready to accept the testimony of the director of the CFPB on the semi-annual report as soon as an individual validly holds this position. Until then, the committee intends to continue to conduct rigorous oversight of the CFPB’s activities, and will expect the CFPB’s cooperation in those efforts, including making other employees available to testify at committee hearings and responding fully to committee requests for documents and information.”</p

President Obama recess-appointed three people to the National Labor Relations Board (NLRB) and Cordray as CFPB Director on January 4, 2012 after the Senate refused to confirm anyone to the four positions.  All four appointments have been challenged in various lawsuits and on January 25, 2013 the NLRB appointments and all subsequent work of that board were invalidated by a federal district court.  Challenges to Cordray’s appointment have not yet been adjudicated.  The President has renewed his nomination of Cordray but thus far Senate Republicans are blocking a vote.</p

None-the-less, Hensarling says in his letter, “The court’s unanimous ruling makes it clear that there is no legally-appointed director of the CFPB at this time. 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.”</p

 “No other regulator has more influence over the daily financial lives of Americans,” he continued. “Dodd-Frank gives the CFPB director the power to decide what financial products and services will – and will not – be available to American consumers and how much they will have to pay for them. How is it fair to American consumers that one unelected, unaccountable bureaucrat in Washington has the power to decide what kind of mortgage, car loan or credit card they can or cannot have? No bureaucrat should have so much control over the financial destiny of Americans, particularly one who is completely insulated from the types of checks and balances that apply to other government agencies.”</p

Recess appointments have been made by presidents dating to Washington but were not common until after World War Two.  President Ronald Reagan made 240 recess appointments, George H.W. Bush 77, Bill Clinton 139, George W. Bush 171, and Barack Obama had made 28 prior to the four referenced here.</p

The press release points to the fact that the committee has scheduled testimony from two CFPB officials to testify on the new Qualified Mortgage rule in May but does not appear, in the portions of the Fuchs letter made public, to be offering the Bureau an opportunity to send another official to present the semi-annual report.

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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