The president also highlighted new powers conferred to the bureau now that a director is in place. The CFPB is the first federal agency with the authority to oversee financial institutions other than banks, which Obama called a critical component of its mandate.
“Now that he’s here, irresponsible debt collectors and payday lenders and independent mortgage servicers and loan providers — they’re all bound by the same rules as everybody else,” Obama said.
This week, the agency launched its program to supervise these firms through direct examinations and, potentially, written reports to the bureau. The Consumer Financial Services Association, which represents payday lenders, said it was committed to working with the CFPB and that it is already “strongly” regulated by state and local officials.
But even as Obama received several rounds of applause from CFPB staff members during a roughly 15-minute visit, several groups were exploring legal challenges to Cordray’s appointment.
At issue is the timing of the president’s move. Typically, the Senate must confirm presidential appointees, but Republicans blocked Cordray’s nomination after Obama refused to address their requests for structural changes to the bureau.
The GOP also prevented the president from appointing Cordray while the Senate is in recess by keeping the chamber in cursory, pro forma sessions. But on Wednesday, Obama named Cordray to the position anyway, which immediately drew fire from Republicans and business groups.
The U.S Chamber of Commerce called the appointment “constitutionally questionable,” and a spokesman said Friday that the group is “reviewing our options and not ruling anything out.” Meanwhile, the American Center for Law and Justice, a constitutional law firm, said it is “formulating a game plan” to oppose the move.
“This to me was a very brazen move on the president’s part,” said Jay Sekulow, the firm’s chief counsel. “It sets an unbelievable precedent.”
In his speech Friday, Obama sought to highlight the urgency of the appointment, particularly for middle-class households.
“What we want to do is make sure not just that we’re getting back to the status quo,” he said. “We want to make sure that we’re dealing with those underlying problems, getting to a point where middle-class families feel like they can get ahead again.”
Obama’s visit was a milestone for the CFPB, which has been caught in political crosshairs since it was created in summer 2010 as a centerpiece of the president’s effort to reform the nation’s financial system. On Friday, Obama gave a “special shout-out” to Harvard law professor Elizabeth Warren, who founded the bureau but also antagonized Republicans with her sharp rhetoric.
Warren is running for Senate in Massachusetts and called Cordray’s appointment a “win for consumers.”
“We’ve worked hard together to get this far,” she wrote in a letter to supporters. “Let’s show there’s real momentum behind Cordray’s leadership.”