Wednesday, January 04, 2012

President Intends to Use Recess Appointment to Name Cordray CFPB Director

The President is set to use a recess appointment to name Richard Cordray as the first Director of the Consumer Financial Protection Bureau. A Statement on the White House blog sets out the legal and factual background of the appointment.

The Statement notes that the Constitution gives the President the authority to make temporary recess appointments to fill vacant positions when the Senate is in recess, a power all recent Presidents have exercised. The Senate has effectively been in recess for weeks, it says, and is expected to remain in recess for weeks. The Statement posits that in an ``overt attempt to prevent the President from exercising his authority during this period, Republican Senators insisted on using a gimmick’’ called pro forma sessions, which are sessions during which no Senate business is conducted and instead one or two Senators simply gavel in and out of session in a matter of seconds. The Statement asserts that ``gimmicks do not override the President’s constitutional authority to make appointments to keep the government running.’’ In fact, continues the Statement, the lawyers who advised President Bush on recess appointments wrote that the Senate cannot use sham “pro forma” sessions to prevent the President from exercising a constitutional power.

Reacting to the recess appointment, Senator Richard Shelby (R-ALA), Ranking Member on the Banking Committee, said that the President did an end run around Congress, the elected representatives of the American people, in order to avoid accountability to them. Senator Shelby said that he has led the fight for accountability at the consumer bureau. Joined by 44 Republican Senators, Senator Shelby sent a letter last year to the President urging amendments to the Dodd-Frank Act to change the Bureau’s governance, replacing the single Director with a Board to oversee the Bureau. On December 8, 2011, Senator Shelby said on the Senate floor that in order to make the Bureau more accountable, the Bureau should be led by a Board of Directors rather than a single Director.

On the one-year anniversary of the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the House of Representatives passed legislation restructuring the Consumer Financial Protection Bureau created by the Act. The Consumer Financial Protection Safety and Soundness Improvement Act, HR 1315, would establish a bi-partisan, five-member Commission consisting of a Chair and four additional members to carry out all of the duties that would otherwise fall to the Director of the CFPB. Commission members would be appointed by the President, confirmed by the Senate, and would serve five-year terms.

No comments: