Richard Cordray Confirmed as Director of the CFPB Fair Contracts Openly Calls on Cordray to Deny Any “Side Deal”
On Tuesday, July 16, 2013, the United States Senate finally confirmed Richard Cordray by a vote of 66 to 34 as the Director of the Consumer Financial Protection Bureau, which turned two years old today. The delay caused concerns about the scope of agency powers in the absence of a confirmed head of the bureau.
Cordray’s confirmation had been held up by Republicans in the Senate who signed a letter claiming they would hold up any appointment because of a disagreement on the CFPB’s structure. President Obama therefore recess-appointed Cordray on January 4, 2012 and reappointed him this year for a term ending at the end of the year. Cordray’s nomination has been languishing since the initial recess-appointment and was at risk of being deemed unconstitutional by the Supreme Court which next term will take up a parallel involving recess appointment members of the NLRB. In a deal reached on several nominees and use of the Senate filibuster, Cordray’s nomination was finally brought to a vote.
Disturbingly, press reports here and here claimed that Senator Portman of Ohio said that there had been a side deal to Cordray’s confirmation, including that Cordray would testify in front of the Senate Appropriations Committee (which as an independent entity funded by the Federal Reserve it is not subject to) and that significant CFPB regulations would be subject to a cost benefit analysis by OIRA, the Office of Information and Regulatory Affairs, which could delay by months the issuance of regulations by subjecting them to review. A spokesperson for the CFPB stated in one of those reports that Cordray offered to brief the committee publicly on the CFPB budget as he and other staffers have done in the past.
A courtesy briefing is, of course, not the same as an offer to “testify.”
Additional investigation into the issue by Fair Contracts indicates that there was no side deal on cost-benefit analysis or subjecting regulations to OIRA. Fair Contracts calls on Director Cordray to deny publicly any such “deal” as soon as possible so that there is no appearance of any obligation created, even informally. Indeed, one queries how Director Cordray could legally obligate the CFPB to any such procedure without a law — and certainly not as a horse trade for his confirmation. Senator Portman however has recently introduced a bill, S. 1173, called the Independent Agency Regulatory Analysis Act of 2013, which, if it were to ever emerge from committee, could do just that.