Obama, GOP May be Ready to Deal on CFPB
NEW YORK ( TheStreet) -- This time around President Obama and Senate Republicans may play a little nicer when it comes to the Consumer Financial Protection Bureau (CFPB).
Richard Cordray's renomination might provide an opportunity for both parties in Congress to address GOP concerns about the CFPB's governance, according to Kevin Petrasic, a partner in the Global Banking and Payments Systems practice of Paul Hastings in Washington. "There has been suggestion that there may be some sort of deal where Cordray would get confirmed, and a bill might take under consideration a three-to-five member commission to replace the director and have him become the first chairman," Petrasic says.
President Obama on Thursday nominated Cordray to serve a full term as the director of the CFPB, a year after the president made a controversial recess appointment of Cordray to get the new agency up and running.
The CFPB was created as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by the president in July 2010.
After Senate Republicans blocked the nomination of Cordray -- formerly the state attorney general for Ohio - for six months, with Senator minority leader Senate Minority Leader Mitch McConnell (R-Ky.) saying in November 2011 that the president hadn't "done a thing" to address his party's concerns over the new agency's "lack of transparency of accountability," President Obama in January made a recess appointment of Cordray as the new CFPB director.
The recess appointment was controversial, because the Senate was technically in session, on a pro forma basis, because the House of Representatives -- controlled then, as now, by Republicans -- was having someone bang the gavel every three days to keep the entire U.S. Congress in session.
The president on Thursday said that there was "absolutely no excuse" for the Senate not to confirm Cordray quickly to serve a full term.
Cordray on Thursday said that said that "For more than a year, we have been focused on making consumer finance markets work better for the American people," and that the CFPB was approaching "this work with open minds, open ears, and great determination."
While House Financial Services Committee Chairman Jeb Hensarling (R-Texas) was quite gracious on Thursday in congratulating Mary Jo White on her nomination to be the new chairman of the Securities and Exchange Commission, his comments on Cordray's renomination of Cordray took a darker tone:
"President Obama's alleged recess appointment of Mr. Cordray last year was, at best, a highly controversial and legally questionable maneuver. The Dodd-Frank Act places vast, unprecedented and unchecked power completely in the hands of a single person. The CFPB director has the power to decide whether American families can obtain a mortgage, get a car loan or even get a credit card."