Senate Sets Hearing on Contentious CFPB Post

CFPB head Richard Cordray’s nomination is opposed by 43 of the Senate’s 45 Republicans. Photo: Bloomberg.

Despite Republican objections to the nomination, the Senate Banking Committee yesterday scheduled a hearing for next Tuesday on the appointment of Richard Cordray to a full term as director of the Consumer Financial Protection Bureau.

Cordray’s nomination is opposed by 43 of the Senate’s 45 Republicans, who demanded changes to the new consumer agency before they will vote for anyone to be its director. Among the Senate opponents are Mike Crapo of Idaho, who is the leading Republican on the banking panel.

Cordray’s hearing is paired with that of former U.S. attorney Mary Jo White to be chairman of the Securities and Exchange Commission, but Cordray’s hearing is expected to be much more acrimonious.

Questions over Cordray’s abbreviated recess appointment last year by President Obama and the status of a bevy of new rules passed by the CFPB under his watch have dogged his confirmation. Supporters of Cordray will not able to proceed because the Republican opponents have more than the 40 votes necessary to sustain a filibuster, which would bar a vote.

Crapo was adamant in his opposition to the Cordray nomination.

“The decision to renominate Richard Cordray to be director of the Consumer Financial Protection Bureau after using an unconstitutional recess appointment is premature, given the outstanding concerns about the bureau and the legal challenge to the recess appointment,” Crapo said after the president formally nominated Cordray. “Until key structural changes are made to the bureau to ensure accountability and transparency, I will continue my opposition to any nominee for director, as outlined in a letter signed by 45 Republican senators to the president. If the president is looking for a different outcome, the administration should use this as an opportunity to work with us on the critical reforms we have identified to him.”

Word is that Republicans and Democrats are negotiating a deal that would change the structure of the new agency, perhaps installing a multiperson board, which could move the nomination to a vote. But there was no deal as of yesterday.

The credit union lobby has been ambivalent about the new agency but has worked closely with Cordray over the past year to minimize the impact of its new rules on credit unions. NAFCU said it supports the Republicans’ proposal to create a multiperson board to head the agency instead of a single director. CUNA has no position and said it does not get involved in the nomination process.