Rep. Barney Frank, the lead Democrat on the House Financial Services Committee, said late last week that the ongoing stalemate over the confirmation of a director at the Consumer Financial Protection Bureau will not be resolved until at least 2012.
"I think it depends on the next election," Frank said at the Consumer Federation of America's financial services conference in Washington. "I don't see that deadlock being broken."
Frank said he regrets making the agency's full authority contingent on the Senate confirmation of a director — a provision pushed by Senate leaders. But he said the situation is not as bleak as some have said: the bureau still has the power to enforce all existing consumer financial laws that transferred from other regulators.
Until a permanent director is in place, the CFPB can supervise large banks, but cannot regulate nonbanks or prohibit abusive acts or practices.
Republicans have refused to allow a vote on the nomination of Richard Cordray, the president's nominee to be the bureau's first director, until several changes are made, including replacing the director with a commission, subjecting the bureau to the appropriations process and making it easier for other regulators to override the bureau's rules.
Frank said it seems that getting a director confirmed is in the best interest of banks and credit unions, many of whom will be subject to the bureau's rules and oversight while their nonbank counterparts are not. Frank, who is retiring next year, noted that few Republicans have any specific objection to Cordray.
Although he expects the stalemate to continue, Frank said he hopes it will become an issue on the campaign trail.
"What I'm hoping is that enough Republican candidates for the Senate will be confronted with this notion about whether you want to have a new consumer bureau," Frank said.
He does not expect, however, that consumer protection or even financial reform will be a top issue in the presidential race.
