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WASHINGTON — Richard Cordray received polite questions – and even a few compliments – from a panel of U.S. senators at his nomination hearing Tuesday on Capitol Hill. After two hours of testimony, however, his chances for being confirmed as director of Washington’s newest consumer watchdog agency looked grim.
Members of the Senate Banking, Housing and Urban Affairs Committee didn’t dispute the former Ohio attorney general’s background or his qualifications to serve as director of the Consumer Financial Protection Bureau. They even praised the manners of Cordray’s 14-year-old twin children, Holly and Danny, who sat behind their father in the hearing room.
But Republicans have vowed to block any nominee President Barack Obama chooses to lead the consumer bureau until the agency changes its leadership structure and submits to more congressional oversight.
At Tuesday’s hearing, there were few signs of compromise. The event resembled more of a partisan debate over the future of the consumer bureau than an interrogation of Cordray, who promised to do “everything in my power to make the bureau accountable to American consumers, to American businesses and to Congress.”
Sen. Elizabeth Warren, D-Mass., complained that Republicans were withholding approval of Cordray in an effort to hobble a fledgling watchdog agency that they never wanted to exist in the first place.
Created by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, the bureau wields regulatory powers over mortgages, credit reporting, debt collection and payday loans, in addition to other consumer financial products and services. It has a budget of $448 million from the Federal Reserve and a staff of about 1,000. Among Republicans, just three senators and three House members supported the bill that created the agency.
“I see nothing here but a filibuster threat against Director Cordray as an attempt to weaken the consumer agency,” said Warren, who championed the creation of the bureau before running for the Senate.
Sen. Sherrod Brown, D-Ohio, stressed that no one had questioned Cordray’s ability to do the job. Brown said it was time for the Senate to consider Cordray’s qualifications, not to keep fighting old battles.
“Senators are blocking a nominee because they don’t like the agency that he will lead,” he said.
Republicans first filibustered Cordray’s nomination in 2011. In January 2012, Obama used a so-called recess appointment to install Cordray as director of the bureau, sidestepping GOP objections.
The president renominated Cordray earlier this year despite ongoing opposition from Republicans, as well as questions about the legality of Cordray’s recess appointment.
The U.S. Court of Appeals for the D.C. Circuit in January nullified three recess appointments Obama had made to the National Labor Relations Board. The three-judge panel determined that the president could only make a recess appointment if the Senate is formally adjourned between sessions of Congress and only if the job became vacant during that same recess. The decision cast doubt on the legitimacy of Cordray’s appointment, too, because the president announced his appointment to the consumer bureau on the same day that he appointed the labor board members.
Although the case is being appealed, the ruling strengthened Republican opposition to Cordray’s nomination and reinvigorated some members’ campaign to change the consumer bureau.
On Tuesday, the Senate Banking Committee’s ranking member, Mike Crapo, R-Idaho, said he thinks Cordray’s appointment was unconstitutional.
Crapo and fellow Republicans want to replace the bureau’s single directorship with a commission or board of trustees, subject the bureau to the congressional appropriations process and give other federal regulators more influence in the bureau’s rulemaking and policy decisions.
“The Dodd-Frank Act specifically elevated the director of the (bureau) so that he or she holds unique power to determine the agency’s budget and mission priorities without any public debate or input from Congress,” Crapo said.
He said moving to a board format would bring more transparency to the agency, and that including it in the federal appropriations process would let Congress know how its money is being spent.
Republican Sen. Mike Johanns of Nebraska asked Cordray whether he would be willing to appear before members of the powerful Senate Appropriations Committee “to walk through your budget document and just answer questions about that document and spending habits of your agency.”
Cordray answered that he has testified before banking and finance committees in the House and Senate dozens of times in the past two years, but if senators want him to appear before another committee, “we could consider that.”
He added, “If there are measures you suggest, including walking through the budget and being subject to more transparency and accountability that would be satisfactory to you and your colleagues, we could certainly consider those things.”
Cordray shared Tuesday’s nomination hearing with Mary Jo White, Obama’s choice to lead the U.S. Securities and Exchange Commission. White, a former U.S. attorney in Manhattan who made her name prosecuting accused terrorists and mobsters, promised “unrelenting” enforcement of Wall Street.
White assured senators that her private practice work for clients such as JPMorgan Chase and executives from Bank of America and Goldman Sachs over the past decade would not present a conflict of interest.
“If I’m confirmed, the American public will be my client and I will work as zealously as I can,” she said.
White’s path to confirmation is expected to be much smoother than Cordray’s.
