Republicans have requested sweeping structural changes to weaken the agency since it was signed into law as part of financial regulatory reform, demanding that it be run by a board instead of a director, that its budget be subject to congressional approval, and that other regulators have more power than the bureau itself. That means Cordray’s appearance today is an “interview for a job he is unlikely to get,” as the Banking Committee’s ranking Republican, Sen. Richard Shelby (AL), insisted that hearings related to the agency are irrelevant until Obama and Democrats relent on the issues most important to Wall Street banks the CFPB is meant to regulate:
“Opposition to or support of Mr. Cordray’s nomination will become relevant as soon as the President agrees to make the structural changes we’ve requested,” said Jonathan Graffeo, the spokesman for Sen. Richard Shelby (R-Ala.). “Until then, Sen. Shelby and his colleagues stand firmly behind the statement they expressed in their May letter: No accountability, no confirmation.”
Republicans have used various methods to fight the CFPB, harassing Harvard professor Elizabeth Warren (who conceived the idea of the bureau) in Congressional hearings and refusing to allow the Senate to recess in order to avoid recess appointments. That obstruction, which will assuredly continue in Cordray’s hearing today, has been helped by the financial industry’s intense lobbying efforts to block implementation of the reforms and the CFPB in particular. The financial industry, in fact, has spent as much lobbying to block implementation of the Dodd-Frank financial reform law as it did to block the passage of the law itself.
The GOP has benefited from its continued obstruction. The 10 Republican members of the Banking Committee have taken in $31 million from the financial, insurance, and real estate sectors in their Senate careers. Shelby himself has received more than $6.2 million, including more than $1 million from commercial banks, according to the Center for Responsive Politics. Every GOP committee member has signed onto Shelby’s legislation to repeal financial regulatory reform.
Democrats, however, are gearing up for a fight over Cordray’s nomination. Rep. Barney Frank (D-MA) slammed Republican obstruction in an op-ed last week. Banking Committee Chairman Tim Johnson (D-ND), meanwhile, plans to unleash on the Republican Banking Committee members today, blasting them for holding Cordray and consumers hostage. “The purpose of today’s hearing should be to consider whether Mr. Cordray is qualified for [the] job…Instead, a vocal minority is playing games with the process and holding Mr. Cordray’s nomination hostage,” Johnson will say, according to prepared remarks obtained by Politico. “This political gamesmanship is preventing Americans from receiving the consumer protections they deserve.”