Last year, the Consumer Financial Protection Bureau, which aims to help individuals with fairness and transparency in financial transactions such mortgages or credit cards, opened without a director. President Obama had nominated in July former Ohio attorney general Richard Cordray to lead the CFPB, but Republican lawmakers filibustered against Cordray’s nomination receiving an “up or down” vote. Now, the New York Times reports that Obama has appointed Cordray to head the CFPB:
The recess appointment of Richard Cordray on Wednesday as director of the consumer bureau finally gives the fledgling agency the legal standing to supervise those types of financial enterprises, something it has lacked since the bureau was created with the signing of the Dodd-Frank financial regulation act in July 2010.
Although the Dodd-Frank law authorized the consumer agency to regulate the so-called nonbank financial companies, which previously had little supervision, the law was purposely written such that the bureau could not invoke its powers until it had a director.
The bureau had taken responsibility for existing regulations on consumer products at banks and thrifts, it was not able to write new regulations for banking products like mortgages and credit cards until it had a permanent leader.
“Now, with a director, the C.F.P.B. can exercise its full authorities — with respect to both banks and nonbanks — to help those markets operate fairly, transparently, and competitively,” Mr. Cordray, a former Ohio attorney general, said in a blog post Wednesday on the bureau’s Web site. […]
Mr. Cordray was appointed as the enforcement director for the consumer bureau by Elizabeth Warren, who served as a special adviser to President Obama for overseeing the startup of the agency. Though Ms. Warren conceived the bureau, championed it in Congress and was the president’s pick to get it running, she never had the agency’s full powers because she was never formally nominated by the president and confirmed by the Senate. […]
The consumer bureau focuses on “unfair, deceptive or abusive” acts or practices in products like private education loans and prepaid charge cards and at companies like mortgage servicers, which have come under harsh criticism for their foreclosure practices since the housing bubble burst. […]
Senate opponents want the director replaced with a five-member board similar to those of other regulatory agencies and have refused to consider voting on any nominee until the structure is changed. Currently, any rules that the director puts in place can be overturned only by a vote of two-thirds of the Financial Stability Oversight Council, a 10-member board created by Dodd-Frank law to monitor the financial system.