At a Senate Banking Committee hearing on Thursday, Sen. Elizabeth Warren (D-MA) rebuked Republicans for blocking Richard Cordray’s confirmation as director of her brainchild, the Consumer Financial Protection Bureau. After a bitter confirmation fight in 2011, President Obama bypassed the Senate using a recess appointment to grant Cordray a temporary term until the end of 2013. Republicans are threatening to filibuster him this time around unless the CFPB is drastically restructured.
Warren declined to question Cordray, who has testified a dozen times. She then directed scrutiny to her Republican colleagues, calling them out for using her former lieutenant’s confirmation as an excuse to undermine the Bureau:
What I want to know is why every banking regulator since the Civil War has been funded outside the appropriations process — but unlike the consumer agency, no one in the U.S. Senate has held up confirmation of their directors demanding that that agency or those agencies be redesigned…I see nothing here but a filibuster threat against Director Cordray as an attempt to weaken the consumer agency. I think the delay in getting him confirmed is bad for consumers, it’s bad for small banks, bad for credit unions, for anyone trying to offer an honest product in an honest market. The American people deserve a Congress that worries less about helping big banks and more about helping regular people who have been cheated on mortgages, on credit cards, on student loans and on credit reports. I hope you get confirmed. You have earned it, Director Cordray.
Warren herself was ousted from the running for CFPB director in an effort to avoid a confirmation battle with Republicans. Still, Senate Republicans are intent on holding up the confirmation of any director to the Bureau. In a letter to Obama last month, 43 Senate Republicans vowed to filibuster any nominee unless they are allowed to hobble the agency’s authority.
Republicans have tried to weaken the Bureau from its inception, claiming it lacks transparency. Unlike other financial regulatory agencies, which are dependent on Congress for funding, the CFPB is intended to be an independent agency with independent funding. If Republicans get their way, the CFPB will lose this independence, making it vulnerable to the partisan shenanigans and funding shortages that have derailed other regulators.
Cordray’s first term demonstrates the CFPB’s efficacy as an independent agency. In one year, the agency has increased supervision over mortgage lenders, brokers, consumer reporting agencies, and large banks, set up programs to help consumers better understand loan agreements and recoup refunds from deceptive and illegal practices, and wrote new rules to prevent wrongful foreclosures.