In late 2011, a Republican minori- ty in the U.S. Senate shamelessly blocked a vote on President Barack Obama’s nomination of Richard Cordray as head of the Consumer Financial Protection Bureau. Everyone knew that Cordray would receive well more than the 51 votes needed for confirmation. His fitness for the job was not in question.
The Republicans weren’t objecting to the man, they were objecting to the job that he would assume. They complained that the agency would have too much power. This complaint ignored the fact that the agency was a creation of Congress, and if a majority in Congress agreed, any such excess power could be reined in legislatively. The Republicans, unable to achieve what they wanted through legislation, turned instead to the filibuster, a tactic that was once rare but has become a mainstay in the obstructionist arsenal of Senate minorities.
The House leadership joined the effort to block Cordray’s appointment by pretending to be in session over the Christmas break, which would preclude Obama from making a recess appointment. The president declared as a farce the pro forma holiday sessions that involved keeping a skeletal crew at the Capitol, but doing no legislative work. He appointed Cordray anyway.
A good year’s work
There was some squawking, but Obama declared that the consumer bureau was legally required to have a director to fully function. In the year since, Cordray attacked the challenges of the job with gusto, just as we had seen him do here in Ohio. He last served as attorney general and in that capacity he fought New York financial firms to recover lost Ohio pension funds and went after “foreclosure mills” that tried to cut corners in putting people on the street. In the Mahoning Valley he took an active role in protecting the community’s assets during the dismantling and sale of Forum Health.
Because his was a recess appointment during the 112th Congress, Cordray’s tenure will expire in the first year of this 113th Congress. Obama on Thursday named Cordray to continue in the job. He’ll once again face Senate confirmation.
Two weeks ago, the Consumer Financial Protection Bureau imposed a range of obligations and restrictions on lenders, including bans on the risky “interest-only” and “no documentation” loans that helped inflate the housing bubble, which burst with disastrous results.
Lenders will be required to verify and inspect borrowers’ financial records. The rules discourage them from saddling borrowers with total debt payments exceeding 43 percent of the person’s annual income. Cordray said the new rules protect consumers from bad loans while giving banks the legal assurances they need to increase lending.
Leveling the playing field
It’s only the most visible example of the job Cordray and his new department are doing. In announcing the renomination. Obama commented that, “Financial institutions have plenty of lobbyists looking out for their interests. The American people need Richard to keep standing up for them.”
We would agree, and it would be wise for the Senate to recognize not only that there’s a place for the CFPB, but that Cordray has demonstrated that he belongs at its head.
Senate Majority Leader Harry Reid, a Democrat, and his counter part, Mitch McConnell, the minority leader, announced yesterday that they have reached an agreement to rein in the abuse of the filibuster in their chamber. We have misgivings about that agreement, which we’ll address at another time.
But if Reid and McConnell want to demonstrate that there is a new era of cooperation unfolding in the Senate, the quick confirmation of Cordray would be an excellent place to start.