The Akron Beacon Journal
The Senate Banking Committee returns today to the nomination of Richard Cordray to serve as the director of the Consumer Finance Protection Bureau. The former Ohio treasurer and attorney general has been in the post for the past year, due to a recess appointment by President Obama. Cordray has received high marks, even representatives of the businesses the office oversees have praised his open, deliberative and practical approach.
Yet the prospect of Cordray winning confirmation remains as bleak as his first round. Senate Republicans insist the problem isn’t the nominee. They respect his work and acknowledge his qualifications. What troubles them is the structure of the bureau, part of the financial reforms enacted by Congress in the wake of the Wall Street calamity. They don’t like the funding mechanism, removed from the congressional appropriations process. Neither are they keen on a single director running the operation, minus a bipartisan board or commission with responsibility.
Recall that Congress acted with clear purpose in constructing the office. The bureau receives funding through the Federal Reserve Board. This measure of independence has been applied to other agencies. It is designed to keep special interests at bay, or lawmakers eager to do their bidding. The use of a single director aims for clarity in accountability and quick action. The step hardly is unprecedented. Consider the Office of Comptroller of the Currency, or any Cabinet position, for that matter.
If there is room for compromise, the White House perhaps willing to tinker, it would be best to focus on adding a board or commission. Yet this step brings its own concerns. The board or commission members would require Senate confirmation, inviting new opportunities for gridlock and dysfunction, positions long unfilled.
Worth recalling is that the country’s elected representatives and senators debated, compromised and approved the creation of the bureau. This wasn’t done nefariously. They responded to a problem — abusive and deceptive practices in the financial industry that put many consumers at a severe disadvantage and in trouble.
Sen. Richard Shelby, an Alabama Republican, has declared that “no one person … should have so much unfettered power over the American people.” He distorts heavily the stakes.
Actually, the director leads a bureau that seeks to aid consumers, countering the mighty influence of financial interests. Already the bureau has returned $425 million to consumers mistreated by credit card companies. It has moved to bring greater transparency and understanding to student loans and mortgages, equipping consumers to avoid “debt traps” and other schemes.
Cordray has done so in a thoughtful and inclusive way, reflecting, in part, the adequate oversight of the bureau now in place. The director must report twice a year to Congress, lawmakers in position to raise their concerns loudly and often. In addition, the bureau must consult with other financial regulators, weigh costs and benefits and include affected businesses.
A Financial Oversight Stability Board can veto its actions. The inspector general of the Federal Reserve Board works as a watchdog. So do the Government Accountability Office and the comptroller general. So the bureau does not hold “unfettered power.” It does have an important job and deserves a director to take the lead.
Republicans upset with its structure would do well to respect the legislative process, by confirming the qualified Richard Cordray and then seeking the majority required to change the law.