Obama’s consumer bureau appointment raises political, legal stakes – Charles S. Clark (Government Executive)
January 4, 2012

“President Obama’s move Wednesday to use a recess appointment to name former Ohio Attorney General Richard Cordray director of the six-month-old Consumer Financial Protection Bureau was greeted as ‘bold’ by consumer activists, but spurned as possibly illegal by Republican lawmakers who have spent months blocking any nominee. At a campaign-style speech on the economy at a high school in Shaker Heights, Ohio, Obama named Cordray — who had been serving as CFPB’s enforcement chief — as ‘America’s consumer watchdog,’ a move that ‘brings us closer to the economy we need, an economy where everyone plays by the rules,’ he said. …For many in the financial industry, much is riding on Republican efforts to force a reopening of the 2010 Dodd-Frank Financial Reform Law with the goal of giving Congress greater oversight and dispersing power at CFBP among members of a board rather than bestowing it all on a director.  …But to leaders of Americans for Financial Reform, a coalition of 250 national consumer, labor, civil rights and senior citizens advocacy groups, the arrival of a leader is vital because CFPB is the ‘linchpin of the entire Dodd-Frank law,’ said Marcus Stanley, AFR policy director. ‘Loans to the consumer is where the rubber meets the road for financial products related to financial crash of 2007 and 2008,’ he said during a conference call with reporters before Obama’s announcement. Ed Mierzwinski, director of the consumer program at U.S. PIRG, praised Obama’s ‘bold and independent decision’ that rejected the efforts of Wall Street interest groups to ‘defang or defund the bureau.’ Travis Plunkett, legislative director of the Consumer Federation of America, said that because of this ‘culmination of a long fight, the bureau no longer has to monitor financial abuses with one hand tied behind its back.’ He said he expected concrete results in 2012 from CFBP’s efforts to research and publicize abuses of consumers, particularly military families, by predatory mortgage lenders and payday lenders and such issues as prepaid credit cards. David Arkush, director of Public Citizen’s Congress watch division, argued Cordray’s appointment is legal. ‘The Senate is effectively on a five-week recess,’ he said. The pro forma sessions the chamber has been holding every three days “do not bar the president from making a recess appointment. ‘Whether the current recess is viewed as five weeks or three days long, it is long enough,’ he said, adding that Harry Truman and Theodore Roosevelt both made appointments during recesses of three or fewer days.”  Click here for more.