“Until key structural changes are made to the bureau to ensure accountability and transparency, I will continue my opposition to any nominee for director,” said Sen. Mike Crapo (R-Idaho), ranking member of the Senate Banking Committee. “If the president is looking for a different outcome, the administration should use this as an opportunity to work with us on the critical reforms we have identified.”
There are at least three bills and one ongoing court case aimed at turning the bureau into a five-member commission, subject to the congressional appropriations process.
Consumer advocates, however, say Cordray has taken a measured approach to regulation, as illustrated by recent rules about mortgage lending, and demonstrated a willingness to work with all interests. They might not always agree with his positions, but they support his effort to continue the work. Some question whether the GOP structural argument is an attempt to destroy the agency.
“Republicans just talk about turning the CFPB into a commission, but they’re not going to limit their fight to that,” said Ed Mierzwinski, consumer program director for the U.S. Public Interest Research Group. “They want to take away its funding, eliminate some of its authority.”
Whether the consumer bureau should be led by a director or a commission is a valid debate, he said, but not one that should hold the appointment hostage. Mierzwinski noted that it’s not unprecedented for an agency to have a single director: the Office of the Comptroller of the Currency, which regulates the nation’s largest banks, is led by one person.
Those who support having a commission-led agency say that it is the best way to protect consumer interests in the long run, because the strength of enforcement could waver depending on who is at the helm.
“If the Republicans ever get the Senate back, it will be the consumer activists calling for a commission,” Richard Hunt, president and chief executive of the Consumer Bankers Association, said during a call with reporters. Like many opponents of the bureau’s structure, Hunt said he has no qualms with Cordray. The director, he said, has proved to be tough but fair, yet there is no guarantee that the next director will be as capable. That is why he thinks there needs to be a board comprised of Democrats and Republicans with staggered terms, much like the Securities and Exchange Commission.
Analysts say Cordray’s best chance of winning confirmation might involve a deal that turns the bureau into a commission with Cordray as chairman.
Jaret Seiberg, senior policy analyst at Guggenheim Partners, thinks “the Obama administration is amenable to this type of deal as long as CFPB continues to be funded outside the congressional appropriations process.”
The White House has not indicated whether the president would consider restructuring the CFPB. Obama has always said the bureau should be independent, with one director. If Republican senators again block Cordray’s nomination, the president could use the recess appointment. But Obama refused to address that issue during a news conference announcing the nomination on Thursday.
Instead, the president focused on the accomplishments of the bureau and the work that still needs to be done.
“Financial institutions have plenty of lobbyists looking out for their interests,” Obama said. “The American people need Richard to keep standing up for them. And there’s absolutely no excuse for the Senate to wait any longer to confirm him.”
Cordray will have to face the Senate Banking Committee, which will probably vote along party lines, as he seeks confirmation. Although the Democrats have 55 seats in the Senate, a single Republican could filibuster a final vote. If that happened, five Republicans would have to break ranks to end the filibuster and push through the nomination.