(1/9/2012) - Wary of Republicans' fiddling while America's economy burns,
President Barack Obama lived up to a promise and used special presidential
powers to put Richard Cordray in place to head the Consumer Financial
Protection Bureau (CFPB).
"I refuse to take 'no' for an answer. I am not going to stand by while a
minority in the Senate puts party ideology ahead of the people we were
elected to serve," Obama said at a political rally-like crowd of 1,300 at a
high school in the Shaker Heights suburb of Cordray's Cleveland
hometown.
With mortgage-related issues at the top of Cordray's
to-do list, the CFPB was born of the massive Dodd-Frank Wall Street
Reform Act as a consumer watchdog to ward off the kind of financial industry
misadventures that helped put the economy in the tank.
The CFPB has long been a target of political stonewalling
from Republicans, even as the agency mounted an impressive watchdog record of snapping to
consumer issues including mortgages, mortgage fraud, credit cards and
student loans, among others.
"The American people deserve to have qualified public servants fighting
for them every day - whether it is to enforce new consumer protections or
uphold the rights of working Americans. We can't wait to act to strengthen
the economy and restore security for our middle class and those trying to
get in it, and that's why I am proud to appoint these fine individuals to
get to work for the American people," President Obama said recently in a prepared
statement.
During a U.S. Senate recess, Obama used special powers to appoint former
Ohio Attorney General Cordray to head the CFPB. He also assigned other
officials to the National Labor Relations Board.
The president has the authority to make appointments without a Senate vote
when the Senate is in recess. As expected, Republicans whined that the
Senate was not in recess, but virtually all Senators were out of town during
Obama's appointment.
The CFPB officially opened in July 2011, followed by Obama's Cordray
nomination that summer. The nomination was cleared by the Senate Banking
Committee, but Republicans, who want to defang the watchdog agency by
diluting its powers, had blocked a Senate vote to confirm Cordray unless
they got their way.
That's not going to happen now, without a court fight. A court ruling
would likely uphold the appointment.
Obama has judiciously used the recess-appointement power far less (29
times) than either George W. Bush (171) or Bill Clinton (139).
However, a court fight wouldn't be a surprise from Republicans who've
spent much of the past four years fighting to undo achievements rather than
actually creating any of their own.
With a director at the helm, the CFPB can now flex its regulatory muscle
and target non-bank entities such as mortgage brokers and mortgage
servicers, as well as speed up its ongoing efforts related to other issues,
including simplifying mortgage borrower disclosures and shaping the
definition of Dodd-Frank's "qualified mortgage."
The manual, with a special focus on mortgage servicing, is a guide to how
CFPB will supervise and examine consumer financial service providers.
The agency's plate is full of a host of additional issues it will
address.
The Consumer Federation of America (CFA) and other consumer advocates
have noted financial practices that continue to harm consumers, including
targeting military service members with payday loans and other predatory
finances; mortgage foreclosure abuses, bank payday and overdraft loans with
exorbitant fees and pre-paid credit card fees.
"The list of financial tricks and traps that consumers are forced to deal
with keeps growing. Fourteen months after Congress created the CFPB, the
agency needs a permanent leader so it is not fighting financial abuses with
one arm tied behind its back," said Travis Plunkett, CFA's Legislative
Director.
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