After averting a showdown that risked political gridlock, the U.S. Senate on Tuesday appointed Richard Cordray to head the Consumer Financial Protection Bureau (CFPB).
The Senate voted 66-34 to confirm Cordray, who has been serving as director of the bureau since January 2012 after President Barack Obama announced his nomination in July 2011 by way of the Wall Street Reform Act, which insituted the CFPB.
Republicans refused to acknowledge not only Cordray's appointment, but also that of six other executive branch nominees, including several candidates for the National Labor Relations Board, because the nominations were made when Congress was on recess.
Twelve Republicans joined the Democrat-led Senate to support Cordray's nomination just hours after party leaders hashed out a deal to leave existing filibuster rules in place.
On Monday, Senate Majority Leader Harry Reid, D-Nev., said without an agreement on the appointments in place, Democrats would unilaterally change filibuster rules to keep the Republican minority from blocking a vote.
Specifically, Reid had threatened to alter the Senate's filibuster rules, which allow for unlimited debate unless there are 60 votes to cut it off, so that the nominees could be confirmed by a simple majority of 51 votes. Democrats hold 54 seats in the Senate.
In exchange for leaving filibuster rules intact, Republicans agreed not to block President Obama's appointment of new branch nominees, thus averting the so-called ‘nuclear option’ that would have led to Senate gridlock and, subsequently, potential inaction on important pending legislation, including immigration reform, raising the U.S. debt ceiling, and a proposal to hold down student loan rates.
While the nominees will receive votes, Republicans are still threatening to block future nominations using filibuster rules. Meanwhile, Democrats continue to threaten to change filibuster rules in the event Republicans attempt to block future executive appointments.
Cordray's confirmation brings certainty that the CFPB's new mortgage banking rules will go into effect starting in January. Had his appointment been blocked, it may have negated the rules crafted by the CFPB to date.
‘During his tenure at the CFPB, Director Cordray has shown himself to be a deliberative regulator with a willingness to consider the views of all stakeholders,’ said Frank Keating, president and CEO of the American Bankers Association, in a statement. ‘The CFPB has several major issues before it, including the implementation of its Qualified Mortgage rule, which will determine the future of the mortgage market in this country.
‘As this relatively new bureau continues to form, we are hopeful that Director Cordray and the CFPB's staff will show a continued willingness to work with our industry to ensure that mortgage and other credit products remain available to all creditworthy borrowers,’ Keating added. ‘That is the goal of the banking industry and one we hope the CFPB shares.’
‘Three years ago this week, the Senate passed the Wall Street Reform Act to address the historic instability of our financial system,’ said Senate Banking Committee Chairman Tim Johnson, D-SD, in a statement. ‘Turmoil in our financial system had revealed that many Americans were trapped with financial products they did not fully understand, and that no federal agency was looking out for consumers. This Act created the Consumer Financial Protection Bureau – the first federal agency tasked with putting consumers first – and over the past two years, the Bureau has taken significant steps to improve the consumer experience in many parts of the financial marketplace.
‘I am glad that the Senate set aside partisan politics and allowed this vote on Mr. Cordray's merits to go forward,’ Johnson added. ‘Mr. Cordray has done excellent work at the CFPB, first as its first head of enforcement, and as President Obama's first nominee to head the Bureau. I am confident that the CFPB will continue to flourish under Mr. Cordray's leadership.’
‘I am honored to be confirmed by the Senate as the director of the Consumer Financial Protection Bureau,’ Cordray said in a statement following the vote. ‘For nearly two years, we have been focused on making consumer finance markets work better for the American people. Today's action brings added certainty to the industries we oversee and reinforces our responsibility to stand on the side of consumers and see that they are treated fairly in the financial marketplace. We will continue our essential work and each one of us, including myself, is grateful for the opportunity to serve our country in this important way.’
Cordray is to serve a five-year term.
