Complete Story
Obama Names Cordray Top Consumer Watchdog
Move sidesteps Senate; Republicans fume
SHAKER HEIGHTS, Ohio — Defying congressional Republicans, President Barack Obama appointed Richard Cordray yesterday to head a new consumer-protection agency.
The decision to install Cordray as director of the Consumer Financial Protection Bureau without Senate approval rankled Republicans in part because they say the U.S. Senate is not on recess. The U.S. Constitution permits such appointments only when the Senate is not in session.
Obama, whose re-election bid this year is quickly taking shape as a contrast between him and his Republican counterparts in Congress, announced the appointment in Cordray’s home state. Ohio’s former attorney general was on stage with the president in front of more than 1,200 people at Shaker Heights High School in suburban Cleveland.
Obama nominated Cordray in July to head a bureau designed to give consumers better information about financial services and watch for unfair, deceptive or abusive acts or practices by financial companies, including credit-card providers and mortgage companies.
But last month the Senate refused to confirm Cordray, with Ohio’s Sen. Rob Portman and more than 40 other Republican senators using a filibuster to prevent a floor vote.
“Every day that Richard waited to be confirmed ... was another day when millions of Americans were left unprotected,” Obama said yesterday. “Because without a director in place, the consumer-watchdog agency we’ve set up doesn’t have the tools it needs to prevent dishonest mortgage brokers, payday lenders and debt collectors from taking advantage of consumers, and that’s inexcusable. It’s wrong. And I refuse to take ‘no’ for an answer.”
Cordray was scheduled to be sworn into office last night by Judge Kate O’Malley, a federal appeals court judge originally from Ohio.
“Now that I’m director, we will have the full authority to protect the American consumer, and we’re going to do just that,” Cordray said last night in a telephone interview. “We needed a director; we now have a director.”
Cordray said that although he would work full time in Washington, he would continue to commute on weekends from his home in Grove City.
Republicans, including House Speaker John Boehner of West Chester, quickly denounced Obama’s appointment of Cordray as a power grab and potentially illegal.
The dispute centers on the Senate’s status and the procedural moves taken by the GOP to prevent such appointments.
Because the House has not permitted the Senate to recess, the Senate has scheduled informal sessions every third day, where no official business is conducted. The Senate briefly recessed Tuesday but is not expected to convene for official business until Jan. 23.
Republicans insist that those “pro forma” Senate sessions legally prohibit Obama from making a recess appointment, citing past statements made by Obama when he was a Democrat in the U.S. Senate and by current Democratic Senate Majority Leader Harry Reid.
“This recess appointment represents a sharp departure from a long-standing precedent that has limited the president to recess appointments only when the Senate is in a recess of 10 days or longer,” said Republican Senate Minority Leader Mitch McConnell of Kentucky. “Breaking from this precedent lands this appointee in uncertain legal territory, threatens the confirmation process and fundamentally endangers the Congress’s role in providing a check on the excesses of the executive branch.”
On a conference call, Republican National Committee Chairman Reince Priebus said, “The Senate is not in recess, and there’s not a person on the face of the Earth who can say it is.”
Republican presidential candidate Mitt Romney, meanwhile, called the new agency “perhaps the most powerful and unaccountable bureaucracy in the history of our nation,” and said Obama’s appointment “represents Chicago-style politics at its worst.”
Portman called Cordray “a good public servant,” but said he was concerned that the new agency lacked appropriate congressional oversight. He said Obama’s move was an example of “dramatic partisan overreach.”
The White House pushed back, calling the pro forma sessions a “gimmick” and contending that legal counsel for both Obama and former President George W. Bush said that the Senate’s informal sessions could not prevent a recess appointment.
By making the recess appointment yesterday instead of Tuesday — after the second session of the 112th Congress convened — Obama essentially appointed Cordray to a two-year term, instead of a one-year term. The Constitution says recess appointments conclude at the end of the next session, in this case, the session of Congress that begins in 2013. The recess appointment could also conclude, however, if Cordray is confirmed by the Senate.
“This could give him almost two years,” said Carl Tobias, a law professor at the University of Richmond in Virginia
Cordray, 52, who lost his re-election bid as attorney general to Republican Mike DeWine in 2010 and previously served as state treasurer, told reporters that “we’re gonna begin working to expand our program to nonbanks, which is an area we haven’t been able to touch up until now,” before he was pulled away by White House press secretary Jay Carney.
Obama, in making his case for Cordray’s recess appointment, highlighted a visit he and Cordray made earlier yesterday to the Cleveland-area home of Endia and William Eason, who the White House said nearly lost their home because of predatory lending by a mortgage broker about 10 years ago. Obama also said Republicans weren’t opposed to Cordray specifically, citing bipartisan support for Cordray among attorney generals across the nation.
“I have an obligation to act on behalf of the American people,” Obama said. “I will not stand by while a minority in the Senate puts party ideology ahead of the people that we were elected to serve.”
Of Cordray, Obama cracked: “Rich is a really nice guy. You know, you look at him and you think, this guy’s not somebody who’s going around picking fights, and yet, this fight on behalf of consumers is something Richard has been waging here in Ohio for the better part of two decades.”
Democrats applauded the move yesterday. Both Rep. Betty Sutton, D-Copley, and U.S. Sen. Sherrod Brown accused Republicans of siding with “Wall Street” instead of allowing Cordray’s nomination to get a vote last year.
Concluding his speech, the president said:
“I know you’re hearing a lot of promises from a lot of politicians lately, but today, you’re only going to hear one from me. As long as I have the privilege of serving as your president, I promise to do everything I can, every day, to make this country a place where hard work and responsibility mean something — where everyone can get ahead, not just those at the very top or those who know how to work the system.”
