McConnell partners with Crapo and other obstructionist Republican Senators hoping to flush CFPB down the toilet

Consumer Financial Protection Bureau

The Consumer Financial Protection Bureau (CFPB) was created as a new government bureau in 2010 and is tasked with the important role of enforcing laws in the financial industry.  Its founding is the recommended cure for the recklessness in the financial industry that caused the financial disaster of 2008.  Its enactment is legislated through the Dodd-Frank Act.

Crapo (rear) and McConnell

It appears that the Republican obstructionists in Congress do not believe that they have demonstrated well enough their lack of support for the American consumer.  Led by Mitch McConnell and Mike Crapo (pronounced cray-po), forty-three Republican Senators have signed a letter to President Obama indicating that they will not approve Richard Cordray as the Consumer Financial Protection Bureau's Director unless their demands are met.  (Sounds like something a terrorist group might say.)  According to Senator Crapo, it is not Richard Cordray that they oppose, it is the Consumer Financial Protection Bureau (CFPB) in general.

This same scenario happened last year.  The Republicans blocked Richard Cordray so the new Bureau operated without a Director.  But the bureau has no enforcement power under the Dodd-Frank Act unless it has a Director.  So  President Obama assigned Richard Cordray as Director once again, but this time while the Senate was in recess.

A President is constitutionally entitled to make such recess appointments and many of both Parties have done so in the past.  The controversy this time is about the Republicans claim that they were really working and in session at the time of the appointment.  To prevent President Obama from making this appointment, on their way out the door for intersession vacation, Republicans indicated that they were in a "pro-forma" session.  That supposedly means that they are in session and working so they must approve Presidential appointments.  But no one was present or working in the Senate.  It was simply a tactic that Republicans used to block the President's constitutional authority.

In a similar case concerning the National Labor Relations Board appointments, the US District Court of Appeals for the District of Columbia Circuit ruled that the President can not be allowed to make a determination that the Senate is in recess because it could allow him to make recess appointments at any time.  It is my opinion that this decision proves our judicial system is fallible.  Perhaps they do not follow politics, but it should have been obvious or very easy to check that the Senate was in recess.  The mere statement of a "pro-forma" session does not make it so.  The court's decision actually gives license to another example of Republican obstruction tactics where the constitutional rights of a President can be blocked by intentionally lying about being in session.  The decision is expected to be reversed in future court appeals.

To be fair, Republicans have two major demands that would change the autonomous intent of the bureau.

First, they are demanding that the structure of the CFPB be changed.  They believe that there is too much power in the control of one person, namely the Director.  Republicans would prefer to see a board or commission in charge.  My guess is that the Republican's goal for the commission would be to staff it with the same financial experts who helped bring on the financial crises or at least staff it with people whose business interests conflict with the bureau's autonomous role.  Sort of like having gangsters run the Federal Bureau of Investigation.

Second, they want Congress to have oversight of the Bureau's budget.  They claim that the Director can tap into the Federal Reserve System to get any money he feels necessary at any time.  In actual fact however, the Director must submit a budget request to the Federal Reserve with justification and evidence of actuals from prior years.  Legislators have approved this procedure as acceptable when passing the Dodd-Frank Act.  In passing Dodd-Frank they have also approved a discretionary $200 million in Fed funds to be available if necessary, but that discretionary amount must be approved by the  Congressional appropriations process.  Perhaps Republicans don't like Dodd-Frank, but it is the law and they can't simply not abide by its rulings.

In summary, here is my assessment of the situation.  The Republicans do not disapprove of Richard Cordray, yet they are willing to reject him or anyone that the President selects so that they can accomplish their primary political goal of bending the structure of the CFPB into one that benefits their wealthy supporters instead of the American consumer.  I wouldn't expect anything less.