What Does The Cordray Confirmation Mean?

Tuesday saw two very important Senate votes. First came Harry Reid's cloture vote to end the nearly two year-long GOP filibuster of Richard Cordray's nomination to be Director of the Bureau of Consumer Financial Protection. The Republicans and their Wall Street masters don't want consumers protected from banksters and they oppose the Bureau itself and have blocked Cordray's appointment for that reason rather than because they found anything wrong with Cordray himself. Wednesday Lindsey Graham-- mostly preoccupied with grandstanding about boycotting the 2014 Olympics in Moscow-- admitted the GOP was holding up the nomination as a political tactic. “Cordray was being filibustered because we don’t like the law... That’s not a reason to deny someone their appointment. We were wrong.” He was one of 17 Republicans who broke with McConnell and the radical obstructionists to break the GOP/Wall Street filibuster. Reid needed 60 votes and got 71-- with 29 still acting like spoiled children.

A few hours later, Reid brought up the nomination, which only needed 51 votes, and it passed 66-34. The impact on ordinary American families is likely to be much greater than the confirmation of most nominees. Elizabeth Warren came up with the idea of the CFPB and was gratified to see the Senate finally move on Cordray's nomination. "After more than 700 days of waiting, Rich Cordray will finally get the confirmation vote he deserves from the U.S. Senate.  Director Cordray has won praise from consumer and industry groups, and from Republicans and Democrats, for his fair and effective approach. With Director Cordray's confirmation, we will be able to say loudly, clearly, and with confidence:  the consumer agency is the law of the land and is here to stay.  We fought hard for the agency, and we proved that big change is still possible in Washington.  Now we have the watchdog that the American people deserve-- a watchdog looking out for middle class families, getting rid of tricks, traps, and fine print, and holding financial institutions accountable when they break the law."

Banks and financial firms opposed creation of the bureau, which was established with the explicit aim of regulating the kind of risky consumer financial products that contributed to the 2008 financial crisis. Isaac Boltansky, an analyst with Compass Point Research & Trading LLC in Washington, said he expects the agency to remain a lightning rod for controversy.

“Cordray’s confirmation will remove a meaningful operational cloud that has hovered over the CFPB for three years, but there is no reason to believe that the political rhetoric surrounding the agency will subside,” Boltansky said in an e-mail.

Senator Bob Corker, a Tennessee Republican, said he would still push for changes to the consumer bureau’s structure that he said could come when his party is in the majority. The next round of Senate elections are in November 2014.

“There wasn’t any way to make it happen prior to this nomination coming up,” Corker said in an interview. “There’s a possibility that some additional structural changes take place.”

Senator Jeff Merkley, an Oregon Democrat, said the Senate deal ensures that the consumer bureau will take shape as the authors of Dodd-Frank intended.

“For two years, since it was formed, there has been a battle over whether it would be fully formed and become a part of the landscape, the executive branch landscape, defending the rights of Americans against predatory practices,” Merkley told reporters. “That question is answered today.”

Republican senators refused for more than two years to permit a confirmation vote on Cordray, demanding that the bureau be restructured to put more curbs on the director’s power and impose congressional controls over the agency’s budget.

“They don’t like the fact that this first-ever financial watchdog with the explicit mission of protecting consumers instead of bankers is doing exactly what it is supposed to,” said Lisa Donner, executive director of Americans for Financial Reform, an umbrella group of labor unions, civil rights groups and consumer advocates.

Over the last three years, Republicans accused the agency of being unaccountable and overly powerful, spending too much money, and collecting too much data on American consumers.

All the same, the agency remained popular with the public, and Warren’s role in setting it up heightened the bureau’s profile. Its positive image was in part a function of the unpopularity of the large banks that got federal bailouts during the financial crisis, according to a new poll by Washington-based Lake Research Partners. 

Eight in 10 voters support the work of the CFPB, according to the poll, which was conducted among 1,004 likely voters from July 8 to 11, and has a margin of error of plus or minus 3.1 percentage points. Public support cuts across party lines, the poll found, with 91 percent of Democrats, 71 percent of Republicans and 79 percent of independents backing the agency.

Through enforcement actions against companies including Capital One Financial Corp. (COF), American Express Co. (AXP) and U.S. Bancorp, the consumer bureau has returned more than $432 million to defrauded consumers. It has also set up a system for registering complaints with banks, student lenders, credit bureaus and debt collectors, a tool that at least 125,000 people have used since its inception in July 2012.

The agency has also written rules aimed at cleaning up the mortgage market that was at the heart of the financial crisis. The new regulations cover underwriting, servicing and loan officer incentives.

Cordray, the agency’s first enforcement chief, was nominated twice and waited more than 700 days for a Senate confirmation vote. In exchange for proceeding with Cordray’s confirmation, Obama agreed to nominate two new candidates to the National Labor Relations Board.

With the confirmation, the consumer bureau will be able to exercise its full authority over large banks and a range of non-bank financial firms, including payday lenders and mortgage originators, without any legal threat to its authority.

Richard Hunt, president of the Consumer Bankers Association, said having a director in place for the five-year term envisioned by Dodd-Frank means that “nothing stops the agency” from doing what it wants.

“There is potential to overreach here, and it has nothing to do with Cordray,” Hunt said in an interview.

Dodd-Frank gave the bureau authority to supervise banks with more than $10 billion in assets, a group that includes JPMorgan Chase & Co. (JPM) and Lafayette, Louisiana-based Iberiabank Corp. (IBKC) It can also write regulations and enforce laws to protect consumers from abusive practices.

Michael Thurman, an attorney with Loeb & Loeb LLP in Los Angeles, said confirmation would “eliminate any doubts” about the agency’s authority. Cordray, a former Ohio attorney general, will use it, he said.

“Given that the CFPB has an extensive enforcement staff, including numerous experienced regulatory attorneys and paralegals, companies subject to CFPB jurisdiction should expect that CFPB enforcement activity will substantially increase in the immediate future,” Thurman said in an e-mail.

Amazing how fast the Republicans move to confirm nominees when Obama puts up putrid Wall Street lackeys like Penny Pritzker. The only person with the good sense top vote against her was Vermont Independent Bernie Sanders. Her confirmation vote was 97-1, even the worst, most obstructionist shitheads like Miss McConnell, Ted Cruz, Vitter, Burr, Sessions, Scott... the whole Hate-America crew, moving fast before someone could talk some sense into Obama. Judging by how long it took the Republicans to move on Cordray, there's every reason to believe he'll be Obama's best nominee so far.Yesterday President Obama took a victory lap around the Rose Garden, decrying the right-wing's winner-take-all philosophy that led directly to the Bush Recession that he walked right into as president.

[F]our years ago, even as we were working on restoring the economy and dealing with the immediate crisis, we also wanted to figure out how do we set new rules for the road to make sure that a few bad apples in the financial sector couldn't break the law, or cheat consumers, or put the entire economy at risk.

And I was fortunate even when I was running for President to have some friends like Elizabeth Warren, who had already done a lot of academic work on this and had a whole series of ideas about how we might start making sure that consumers were treated better, and as a consequence, take some of the risk out of the system. And because of those conversations and that work, and because of some terrific efforts by other members in Congress, we were able, for the time in history, to get a consumer watchdog on the job-- to look out for the interests of everyday Americans. And I am very proud to say that last night, Rich Cordray was finally confirmed by the United States Senate to keep serving as America’s consumer watchdog and as the Director of the Consumer Financial Protection Bureau. So we’re very pleased about that.

I first nominated Rich for this position two years ago this week. He was eminently qualified. He had the support of Democrats and Republicans from across the country. A majority of state attorneys general from both parties-- Rich’s former colleagues-- called on him to be confirmed. And for two years, Republicans in the Senate refused to give Rich a simple yes-or-no vote-- not because they didn’t think he was the right person for the job, but because they didn’t like the law that set up the consumer watchdog in the first place.

But without a director in place, the CFPB would have been severely hampered. And the CFPB wasn’t able to give consumers the information they needed to make good, informed decisions. Folks in the financial system who were doing the right thing didn’t have much certainty or clear rules of the road. And the CFPB didn’t have all the tools it needed to protect consumers against mortgage brokers, or credit reporting agencies, or debt collectors who were taking advantage of ordinary Americans.

As a consequence, last year, I took steps on my own to temporarily appoint Richard so he could get to work on their behalf. And Americans everywhere are better off because he did. And thanks to not only Rich, but his terrific team-- I know many are represented here-- we’ve made real strides, even despite the fact that the agency was hampered by the confirmation process.

...[Y]esterday, Richard was officially confirmed. I want to thank Senators from both parties, including Senator Reid, Senator McConnell, Senator McCain, for coming together to help get Rich confirmed.  And obviously, Elizabeth, who wasn’t a senator when she thought this up, but is now a senator-- she was poking and prodding people for a long time to help make it happen.

...Today, if you want to take out a mortgage or a student loan or a payday loan, or you’ve got a credit reporting agency or debt collector who’s causing you problems-- maybe they're not playing by the rules, maybe they're taking advantage of you-- you have somewhere to go. The CFPB has already addressed more than 175,000 complaints from all across the nation, giving people an advocate who is working with them when they're dealing with these financial institutions that may not always be thinking about consumers first... And thanks to the hard work of folks at the CFPB, so far 6 million Americans have gotten more than $400 million in refunds from companies that engaged in unscrupulous practices.

So this is not just some abstract, theoretical exercise. Families, many of them hard-pressed, have money in their pockets, maybe, in some cases, saved a home or were able to send their kids to college, because of the work that Rich and his team is doing right now. And that’s money that oftentimes families didn’t have the power to recover before.