Thursday, January 05, 2012

House Oversight Panel Invites CFPB Director Cordray to Testify as Legislation Blocking His Appointment is Readied

A House panel has invited the recess-appointed CFPB Director Richard Cordray to testify January 24 on policy concerns about the structure of the Bureau and how the concerns of the oversight panel can be reconciled. In a letter to Mr. Cordray, Rep. Patrick McHenry (R-NC), Chair of the Oversight Subcommittee on TARP and Financial Services, noted that the CFPB Director has enormous authority to invalidate any consumer financial product in the United States and broadly regulate financial products and services with minimal oversight. The letter emphasizes that the Subcommittee is deeply interested on how the Director will implement and enforce the unparalleled powers of his new office.

In a separate statement, Chairman McHenry said that this unprecedented appointment runs counter to the constitutional requirements for a recess appointment and President Obama’s own campaign pledge to run the most transparent administration in history. He posited that the enormous authority put in the hands of a single director for the CFPB must be accompanied by appropriate congressional oversight and transparency.

Meanwhile, Rep. Jeff Landry (R- LA) said that he would introduce legislation to prevent Mr. Cordray's appointment from going forward until a court rejects his appointment on its unconstitutionality. The Constitution is clear, said Rep. Landry, the President can appoint officials with the Advice and Consent of the Senate. Since the Senate has advised the President against making Cordray’s nomination and has not given its consent on his appointment and with the House meeting to keep Congress in session, reasoned Rep. Landry, the appointment of Mr. Cordray can only be considered an abuse of the recess appointment process.

Separately, Financial Services Committee Chairman Spencer Bachus (R-ALA), said that the President’s unprecedented attempt to circumvent the Constitution and ignore the law indicates that he has abandoned any effort to work in a bipartisan manner to strengthen accountability and oversight of the CFPB. In the Chairman’s view, the recess appointment of Director Cordray has delegitimized the CFPB and has opened the agency up to legitimate legal challenges that will cripple it for years.

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