WASHINGTON (Legal Newsline) -- In a letter to President Barack Obama last week, a group of 43 Republican senators say they will continue to oppose the confirmation of any nominee, regardless of party affiliation, to be the director of the Consumer Financial Protection Bureau.
"As supporters of strong and effective consumer protections, we write to you to reaffirm our concerns over the transparency and accountability of the Consumer Financial Protection Bureau," according to the one-page letter, which was authored by Senate Republican Leader Mitch McConnell, R-Ky., and Sen. Mike Crapo, R-Idaho and ranking GOP member of the Senate Banking, Housing and Urban Affairs Committee.
"As outlined in our letter of May 2, 2011, we have serious concerns about the lack of congressional oversight of the agency and the lack of normal, democratic checks on its sole director."
The senators argue that "key changes" must be made to "ensure accountability and transparency" at the bureau.
Last month, Obama said he plans to re-nominate Richard Cordray, a former Ohio attorney general, to the post of director.
Obama made the announcement 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.
Cordray's re-nomination is expected to face a fight -- just as it did in 2011 -- and not necessarily because of Cordray himself.
Republicans have issues with how the bureau is set up, and believe that no one person -- in this case, Cordray -- should have such power over the American people.
The agency, they argue, should be run by a board rather than a director.
In their letter, the 43 GOP senators contend that, as currently organized, the CFPB is "insulated" from congressional oversight of its actions and its budget.
"Far too much power is vested in the sole CFPB director without any meaningful checks and balances," the senators wrote.
The lawmakers are urging the adoption of the following three reforms:
- Replace the single director with a board to oversee the bureau. This would provide the same checks on the ability for a single person to dominate the bureau that exist at other independent federal agencies;
- Subject the bureau to the Congressional appropriations process. This would provide oversight and accountability to the American people on how public money is spent; and
- Establish a "safety-and-soundness check" for the prudential financial regulators who oversee the safety and soundness of financial institutions. This would help ensure that excessive regulations do not needlessly cause bank failures.
"We believe these are commonsense reforms that Congress can promptly adopt on a bipartisan basis," the senators wrote. "It is essential that we address these reforms prior to confirming any nominee to be the director of the Consumer Financial Protection Bureau."
The senators also argue that the D.C. Circuit's ruling applies "with equal force" to Cordray's appointment.
"Although the specific facts of that case involved only the NLRB, Cordray was 'recess' appointed at the same time and in the same manner as the alleged NLRB 'appointees,'" they said in a statement.
In addition to the letter, U.S. Sen. Jerry Moran, R-Kansas, filed legislation Friday -- S. 205 -- that would enact reforms contained in the group's letter.
"Allowing a single unelected official to define their own jurisdiction and regulate vast segments of our economy without accountability or restraint is irresponsible regardless of political party," he said in a statement. "Our commonsense legislation brings a variety of perspectives to the Bureau and gives Congress the oversight authority required for such a powerful agency.
"We stand ready to work with the President to make certain the CFPB's mission of consumer protection is both effective and accountable."
Cordray can serve as the bureau's director until the end of 2013 without being confirmed.
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.