“David beat Goliath, but make no mistake: Goliath is not down for the count,” said Warren. “Many of those who have opposed the CFPB are still trying to chip away at its independence by subjecting it entirely to congressional appropriations without any dedicated funding from the Federal Reserve.”
With few exceptions, Republicans opposed the new bureau from the start. They voted en masse against financial reform, with their congressional leaders trolling Wall Street for donations, presenting themselves as the banks’ defenders. In case anyone missed the message, when Spencer Bachus (R-Ala) took over the chair of the House Financial Services Committee, he announced that “in my view, Washington and regulators are there to serve the banks.”
Katrina vanden Heuvel
Editor and publisher of the Nation magazine, vanden Heuvel writes a weekly column for The Post.
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So it’s no surprise that after the 2010 elections, congressional Republicans worked to weaken the bureau, seeking to limit its authority, to replace the director with a board, and to limit its staff, budget and powers. The reality is that the bureau is one of the most constrained regulatory agencies in the government, with its major rulemaking subject to review and approval by a council of regulators.
Increasingly, however, Republicans began to worry that Warren was too effective a spokeswoman. In nomination hearings, she would most likely garner more support for an independent agency. So 44 Republican senators dispatched a letter to Obama stating that they would block by filibuster
any appointee to head the CFPB unless the law was changed and the bureau weakened.
This both forces and frees the president’s hand. By July 21, a director needs to be in position or the agency forfeits powers over non-bank financial institutions until one is in place. Purblind Republican obstruction liberates the president to do the right thing. Given the GOP’s threat, no nominee for the CFPB can be confirmed by the time the bureau can begin instituting rules. It would be a true disservice to Americans — and a craven cave-in to the bank lobby — to allow this to happen. Obama can either make a recess appointment — or be trapped in an endless no-win negotiation with those who have opposed the bureau from the start.
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