Obama plans to re-nominate Cordray as head of CFPB

By Jessica M. Karmasek | Jan 28, 2013

WASHINGTON (Legal Newsline) -- President Barack Obama says he plans to nominate former Ohio Attorney General Richard Cordray to continue as director of the Consumer Financial Protection Bureau.

Obama made the announcement Thursday -- a day ahead of a decision by the U.S. Court of Appeals for the District of Columbia ruling that the President's "intrasession appointment" of three new members to the National Labor Relations Board was an unconstitutional abuse of power.

Obama ended up using a recess appointment to make Cordray the head of the CFPB last January, bypassing GOP senators who opposed his nomination.

The bureau was created by the Dodd-Frank regulatory overhaul and is tasked with overseeing the federal financial laws that specifically protect consumers -- people who keep their money in banks and credit unions, pay for goods and services with their credit cards, and rely on loans to buy homes or pay for college, among other services.

Democrats, including Obama, had argued Republicans were "stonewalling" Cordray's nomination the first time around.

So, the President went ahead and appointed Cordray. In turn, some Republican senators threatened to hold up Obama's nominations, judicial ones in particular.

"Over the last year, Richard has proved to be a champion of American consumers," Obama said in a press conference Thursday afternoon.

"Thanks to his leadership, we've made it tougher for families to be tricked into mortgages they can't afford. We've set clearer rules so that responsible lenders know how to operate fairly."

He continued, "We've launched a 'Know Before You Owe' campaign to help parents and students make smart decisions about paying for college. We've cracked down on credit card companies that charge hidden fees, and forced those companies to make things right. And through it all, Richard has earned a reputation as a straight shooter and somebody who's willing to bring every voice to the table in order to do what's right for consumers and our economy."

In a statement following Obama's announcement, Cordray thanked the President for his continued confidence in him and his team.

"We understand that our mission is to stand on the side of consumers -- our mothers and fathers, sisters and brothers, sons and daughters -- and see that they're treated fairly," he said.

"For more than a year, we have been focused on making consumer finance markets work better for the American people. We approach this work with open minds, open ears and great determination. We all thank you and the Congress for the opportunity and the honor to serve our country in this important way."

But Cordray's re-nomination will most likely face a fight -- just as it did in 2011 -- and not because of Cordray himself.

Republicans have issues with how the CFPB is set up, and believe that no one person should have such power over the American people.

The agency, they argue, should be run by a board rather than a director.

U.S. Sen. Bob Corker, R-Tennessee and a member of the Senate Banking Committee, told the National Journal Friday that he respected Cordray but disagreed with the CFPB's structure.

To be confirmed, Cordray's nomination must first clear the Banking Committee.

U.S. Sen. Mike Crapo, R-Idaho and the ranking GOP member on the committee, told the news magazine he would oppose "any nominee" to head the bureau unless key changes were made.

"If the president is looking for a different outcome, the administration should use this as an opportunity to work with us on the critical reforms we have identified to him," he said.

Cordray, who was rumored to make a run for governor in his home state of Ohio, can serve as CFPB director until the end of 2013 without being confirmed.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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