BLOG VIEW: Last week, the Consumer Financial Protection Bureau (CFPB) added eight new officers to fill its senior leadership rank. This personnel news was announced by Raj Date, who is officially the U.S. Treasury Secretary's special adviser on the CFPB – and, unofficially, the guy running the new bureau.
As we all know, the CFPB does not have an official director, because the Republicans in the Senate have vowed to filibuster any attempt to confirm Richard Cordray, the president's choice for the job. Cordray's nomination passed the Senate Banking Committee last month in a 12-10 vote along party lines, but it has not been scheduled for a confirmation vote by the full Senate – and, quite frankly, nobody seems to be in a rush to get him confirmed.
In the logical world, one might think that the White House would use all of its muscle to ensure Cordray can be put in charge of the bureau. After all, the CFPB was a keystone in the financial reform for which the administration advocated. However, things are unfolding in a manner that gives the impression that the administration does not care about Cordray – and, perhaps, may not even like him.
Filling the position of CFPB director was never a White House priority. Since the bureau was created with the July 2010 passage of the Dodd-Frank Act, President Obama wasted a year refusing to submit a nominee for the job. The obvious choice, Elizabeth Warren, was clearly an irritant to the White House, which ignored endless requests by its political base to officially put her in charge of the bureau.
By the time the White House openly snubbed Warren and officially nominated Cordray in July, it was no secret that he was not the first choice for the job. In fact, he wasn't even the White House's second or third or fourth choice: In the weeks prior to the Cordray nomination, the White House repeatedly planted media reports – via ‘unnamed sources,’ naturally – that it was considering a number of people for the job, including Date, former Michigan Gov. Jennifer Granholm, former Delaware Sen. Ted Kaufman, former Ohio Gov. Ted Strickland and Federal Reserve Board Governor Sarah Bloom Raskin.
In the months since the Cordray nomination, the administration has not been working overtime to ensure that he gets the job. Its last semi-serious effort to push for Cordray's Senate confirmation was three weeks ago, via a conference call by lower-level White House aides to reporters. The aides focused on how the CFPB positively impacts the lives of active-duty military personnel and their families.
But perhaps the White House aides overplayed their hands. Stephanie Cutter, deputy senior adviser to the president, used the conference call to insist that Cordray's confirmation would satisfy the sentiments of the Occupy Wall Street protestors – which is interesting, since I don't recall Cordray ever being mentioned as a financial savior in any of the Occupy Wall Street-inspired rallies.
As for the president, he's not publicly pushing for Cordray. Lately, he is spending most of his time reading from his Teleprompters on a subject in which he has no expertise: job creation. But that's another story.
Still, the Obama administration has no problem allowing important regulatory offices to remain without confirmed leadership. As of today, the CFPB, the Federal Housing Finance Agency (FHFA), the Federal Housing Administration, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency are all being run by ‘acting’ leadership.
And in the relatively rare cases when the administration actually offered someone to fill a leadership void – including Nobel laureate Peter Diamond for a seat on the Federal Reserve Board of Governors or Joseph A. Smith Jr. as FHFA director – it abruptly folded and ran when congressional Republicans worked to block the nominations, leaving the bewildered nominees to withdraw and leave Washington with bitter feelings.
Of course, not having Cordray confirmed by the Senate can be used in the Obama re-election campaign as evidence of a do-nothing Congress that is going out of its way to block anything or anyone championed by the administration. And speaking of re-election, is no secret that the White House wants to keep the CFPB from sinking its teeth into potential campaign donors on Wall Street. According to an Oct. 18 article in the Washington Post, the Obama re-election campaign has ‘brought in more money from employees of banks, hedge funds and other financial service companies than all of the GOP candidates combined.’ The very last thing those deep-pocketed entities want is Cordray telling them how to run their business.
And as last week's personnel news confirmed, the CFPB is up and running without Cordray – albeit in a limited capacity that is far removed from its intended mission. I can't imagine that Cordray is very happy with this situation, though I suspect that the White House couldn't care less.
– Phil Hall, editor, Secondary Marketing Executive
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