43 GOP Senators Threaten Obstruction Unless Consumer Protection Bureau Is Weakened

— by Pat Garofalo on Feb 1, 2013 at 5:45 pm

When the Dodd-Frank financial reform law first passed, Senate Republicans refused to confirm a director for the newly-created Consumer Financial Protection Bureau. They promised to block any nominee — regardless of that nominee’s qualifications for the job — unless the Bureau was weakened and made subservient to the same bank regulators who failed to prevent the 2008 financial crisis.

President Obama was thus forced to recess appoint Ohio Attorney General Richard Cordray to be the Bureau’s first director. Now that Obama has renewed Cordray’s nomination, the Senate GOP is again promising to block any nominee unless the Bureau is watered down:

In a letter sent to President Obama on Friday, 43 Republican senators committed to refusing approval of any nominee to head the consumer watchdog until the bureau underwent significant reform. Lawmakers signing on to the letter included Senate Minority Leader Mitch McConnell (R-Ky.) and Sen. Mike Crapo (R-Idaho), the ranking member of the Senate Banking Committee.

“The CFPB as created by the deeply flawed Dodd-Frank Act is one of the least accountable in Washington,” said McConnell. “Today’s letter reaffirms a commitment by 43 Senators to fix the poorly thought structure of this agency that has unprecedented reach and control over individual consumer decisions — but an unprecedented lack of oversight and accountability.” […]

In particular, Republicans want to see the top of the bureau changed so it is run by a bipartisan, five-member commission, as opposed to a lone director.

They also want to see the bureau’s funding fall under the control of congressional appropriators — it currently is funded via a revenue stream directly from the Federal Reserve.

Republicans want to implement a commission (instead of a lone director) and subject the CFPB to the appropriations process in order to stuff it full of appointees with no interest in regulating and starve it of funds. The other financial system regulators that have to go before Congress for their funds already don’t have the resources to implement Dodd-Frank, thanks the House GOP, leaving large swathes of it unfinished. There are also a host of other reasons that the CFPB needs to be both independently funded and have a strong, independent director.

The CFPB has done important work on behalf of consumers, winning wide praise from consumer advocates and the financial industry. Senate Republicans, meanwhile, have made it abundantly clear that they believe that blocking any and all nominees is an acceptable strategy.


This material [the article above] was created by the Center for American Progress Action Fund. It was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe.


Related Resource:

Feb 2013 GOP Letter to President Obama complete with all 43 signatures

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Getting the Picture: Payday Loans

Paydays loans may give consumers quick and easy access to cash, especially when they find themselves in a financial pinch. But these loans, with their high fees and requirement of immediate repayment out of the consumer’s next paycheck, can send consumers into a cycle of debt.

The CFPB wants to know how these small-dollar loans impact consumers. So yesterday, Director Rich Cordray and several members of our leadership team traveled to Birmingham, Ala., to gather with consumer and civil rights groups, industry representatives, and the public. We wanted to listen, learn, and collect information about the multi-billion dollar payday lending business.

Watch Director Cordray’s introduction to the hearing and tell us what you’re seeing in your community about payday loans.


Payday loans typically allow consumers to receive funds very quickly, but they can also present potential harm. For example, repayment is often due within two weeks at a hefty price. The annual percentage rate (APR) sometimes reaches more than 400 percent. A consumer who can’t pay on time may take on more debt to cover the previous loan that has now come due. This can spiral quickly into an ongoing cycle of debt.

We are just beginning our nonbank supervision program, which includes payday lenders. We want to hear more about how the payday loan market is operating throughout the country. What can you tell us?

Check out the speech,  get the full picture, and then tell us your story!

GOP Furious as Obama for appointing Cordray

For months, Senate Republicans refused to allow an up-or-down vote on President Obama’s nomination of Richard Cordray to head the Consumer Financial Protection Bureau.  This wasn’t just about one man, it was an effort to cripple this critical new agency just as it was getting going.

Thousands of you signed our petition in support of the President’s choice, and in opposition to the GOP’s endless obstructionism.

Well, in a move that truly falls in the category of “awesome,” President Obama just used a recess appointment  to put Cordray into the job without the need for Senate approval (i.e., because the Senate was technically in recess).  The GOP is furious at what it calls hardball tactics.

And we couldn’t be happier.  Send President Obama a message today, thank him for taking this action, and fighting back.  And tell him “more of this, please!”  


Berkley Statement 

 “Time To Put The Interests Of Middle Class Nevadans Ahead Of
The Wall Street Billionaires”

Las Vegas- Congresswoman Shelley Berkley issued the following statement regarding the decision by President Obama to use a recess appointment to install Richard Cordray as Director of the Consumer Financial Protection Agency:

“With our economy struggling to recover, Nevada’s middle class families cannot afford for Dean Heller and his fellow Washington Republicans to continue blocking the new Wall Street Watch Dog Agency from holding the big banks accountable.  It’s long past time to put the interests of middle class Nevadans ahead of the Wall Street billionaires and install a new Director at the Consumer Financial Protection Bureau.”

USA Today Rips Apart Dean Heller’s Argument for Voting Against Wall Street Watch Dog Richard Cordray:

 KEY POINT: For example, critics say the consumer bureau somehow isn’t accountable and can do whatever it likes. In fact, it’s the only banking regulator whose rules can be vetoed by the Financial Stability Oversight Council, a group of the government’s top financial regulators. Critics insist it’s dangerous and unusual that the consumer bureau is run by a single director instead of a multimember commission, but that’s how the Office of the Comptroller of the Currency, a key bank regulator, has operated since 1863. Commissions are more easily hobbled by members who seek to undermine them.

The solution, the GOP senators say, is to make the bureau more accountable to Congress. Quick now: Everyone who trusts members of Congress to write rules, with little public scrutiny, that are disliked by the institutions that fund their campaigns, raise your hands. Those would be the same institutions that want the agency weakened.

No hands? Didn’t think so.

http://www.usatoday.com/news/opinion/editorials/story/2011-12-07/Confirm-consumer-protection-bureau-director/51721834/1

Editorial: Confirm consumer protection bureau director

The consumer bureau, created in the wake of the economic devastation of 2008, is a central part of reforms designed to rein in the bad actors who caused so much misery by writing bad mortgages, creating exotic and dangerous financial products, and otherwise preying on the public. It is specifically charged with preventing financial institutions from marketing deceptive products and forcing them to clearly explain the loans, credit cards, mortgages and other products they do offer.

Given the misery the country has suffered from the government’s failure to monitor such practices, it seems a sensible addition. But it is one of the agencies Republicans in Congress most love to hate. They fought its creation, and having lost they’ve made every effort to hobble it. Today, they are expected to reject President Obama’s nominee to head the agency, not because he is objectionable but because the agency is. So they want to starve it, along with other elements of financial reform. “The less we fund those agencies, the better America will be,” Senate GOP leader Mitch McConnell declared in June.

While GOP critics say soothingly that they’re merely trying to make the consumer agency more accountable, they clearly aim to undercut it.

For example, critics say the consumer bureau somehow isn’t accountable and can do whatever it likes. In fact, it’s the only banking regulator whose rules can be vetoed by the Financial Stability Oversight Council, a group of the government’s top financial regulators. Critics insist it’s dangerous and unusual that the consumer bureau is run by a single director instead of a multimember commission, but that’s how the Office of the Comptroller of the Currency, a key bank regulator, has operated since 1863. Commissions are more easily hobbled by members who seek to undermine them.

The solution, the GOP senators say, is to make the bureau more accountable to Congress. Quick now: Everyone who trusts members of Congress to write rules, with little public scrutiny, that are disliked by the institutions that fund their campaigns, raise your hands. Those would be the same institutions that want the agency weakened.

No hands? Didn’t think so.

The new agency won’t be toothless if the Senate fails to confirm its director. It can already regulate the way banks deal with consumers, and in the five months since it opened, the bureau has worked to create simplified new information for mortgages, student loans and credit cards so consumers know what they’re signing up for.

But without a director, the bureau can’t regulate financial institutions such as the non-bank mortgage lenders that contributed to the financial crisis, or payday lenders who lure desperate borrowers into exorbitantly priced loans that can trap them forever.

That would be a shame. Lawmakers should be wary of too much regulation, but if they ignore the need for reasonable restrictions they risk letting the nation get burned all over again.


Former NV Consumer Advocate Praises President’s Appointment
of Richard Cordray to be Wall Street Watchdog

Las Vegas, NV – Former Nevada Consumer Advocate Timothy Hay released the following statement praising President Obama’s recess appointment of Richard Cordray to serve as the Wall Street watchdog:

“I applaud President Obama for using his Constitutional authority today to recess-appoint former Ohio Attorney General Richard Cordray as head of the Consumer Financial Product Bureau – America’s first-ever consumer watchdog created by the President’s Wall Street reform.  As America’s consumer watchdog, Richard Cordray will have one job – looking out for the best interests of consumers. His job will be to protect families from the abuses of the financial industry, and make sure you’ve got all the information you need to make important financial decisions.   The President’s announcement today highlights his commitment to fighting for the middle class and holding Wall Street accountable, in contrast to Republicans like Mitt Romney who want to continue to let Wall Street write its own rules.”

What’s Your Story?

As the new Director of the Consumer Financial Protection Bureau, and as someone who has been helping to build the Bureau for about a year now, I can tell you it’s an extraordinary privilege to work on behalf of American consumers.

Consumers like you. Tell your story.

https://help.consumerfinance.gov/app/tellyourstory

In our first six months, our team at the Bureau has been answering calls and reading stories from hundreds of American consumers every week. Their stories illustrate the kinds of issues people are dealing with around the country.

These things can happen to anyone. We are not talking about some impersonal abstraction, not about somebody “else.” We are talking about each one of us. We’re talking about our mothers and fathers, our sisters and brothers, our sons and daughters. Regular people who are trying to make the right choices for themselves and their families.

We’ve heard from people like Rebecca from North Carolina. She told us she missed a mortgage payment nine months after her husband lost his job. In the two years since then, her mortgage servicer has increased her payments even though she entered a trial modification in an effort to lower her monthly payments. The servicer has charged her monthly fees for inspections and appraisals that she never asked for and she believes have never occurred, all while repeatedly threatening her with foreclosure unless she shells out more money in unexplained fees. Rebecca has frantically complied with all of these demands because she is afraid of foreclosure and so is doing whatever she can to stay in her home.

Tell us your story at  https://help.consumerfinance.gov/app/tellyourstory

With the stakes so high, consumers need to be able to fully understand the costs and risks of borrowing on credit, and they need to be able to comparison shop for the best deal. Consumers deserve to have someone who will stand on their side, who will protect them against fraud, and who will ensure they are treated fairly. The new Consumer Bureau was created to make sure that these things are achieved for all Americans. The good news is that we have already gotten started.

Over time, we will judge the success of our efforts by considering whether consumers are treated more fairly and with more clarity and candor in the financial marketplace. We deeply believe that we must hear from Americans about their experiences.

Can you share your experience?

https://help.consumerfinance.gov/app/tellyourstory

Think about your own family members. Like all of us, they want to be able to use consumer credit to make their lives better, not worse. That is our goal as well. The financial marketplace can be a potent arena that helps people find and seize opportunity, not condemn them to bewildering failure. By working every day to protect consumers, we will help to fashion a more resilient economy and a stronger country. Join us; work with us; help us make it so.

Thank you,
Richard Cordray
Director
The Consumer Financial Protection Bureau

Heller, Romney, Payday Loan Sharks Rejoice over Senate Filabuster

FOR IMMEDIATE RELEASE
December 8, 2011
Contact: Zach Hudson, Comm. Dir., NSDP
(702) 737-8683

Heller, Romney, Wall Street Execs Rejoice As Senate Blocks Wall Street Watch Dog Chief 

Las Vegas, NV – You could almost hear the cheers all the way from Wall Street after unelected Senator Dean Heller and Washington Republicans blocked Richard Cordray’s nomination to run President Barack Obama’s Wall Street watch dog agency, the Consumer Financial Protection Bureau.  Mitt Romney and Heller were leading the charge to kill this nomination.

Why?  Not because they found Cordray’s qualifications objectionable. But because they oppose the very idea of a watch dog agency holding their buddies on Wall Street accountable.

This should come as no surprise from a Wall Street executive like Mitt Romney, who laid off 1,700 workers in order to make a buck, or Dean Heller, who proudly voted to gut Wall Street reform as a member of Congress.

So thanks to Romney and Heller the score so far today is Wall Street: 1, Nevada’s Middle-Class: 0.  Payday Loan Sharks can continue to stiff consumers with exorbitant rates, as that leg of consumer protection cannot go into effect (as part of the Dodd-Frank legislation) until a Director of the Consumer Financial Protection Bureau is confirmed.

“Mitt Romney and Dean Heller sold out Nevada’s struggling middle-class families in order to protect their friends on Wall Street,” said Nevada State Democratic Party spokesperson Zach Hudson.  “Despite Nevada having the highest unemployment and foreclosure rates in the country thanks to Wall Street abuse, Romney and Heller led the charge to weaken the watch dog agency charged with holding reckless financial institutions accountable.  Today’s vote shows their priorities are upside-down: siding with Wall Street at the expense of struggling Nevada families on Main Street.”

Background:

Romney oversaw 1,700 layoffs in a business deal as head of Bain Capital. But an examination of the Dade deal, which Mr. Romney approved and presided over, shows the unintended human costs and messy financial consequences behind the brand of capitalism that he practiced for 15 years.  At Bain Capital’s direction, Dade quadrupled the money it owed creditors and vendors. It took steps that propelled the business toward bankruptcy. And in waves of layoffs, it cut loose 1,700 workers in the United States, including Brian and Christine Shoemaker, who lost their jobs at a plant in Westwood, Mass. Staggered, Mr. Shoemaker wondered, “How can the bean counters just come in here and say, Hey, it’s over?” [New York Times, 11/12/11]

Columnist John L. Smith: Heller Thinks Foreclosure Crisis Should Be Left To The Private Sector To Fix. In July 2011 Las Vegas Review-Journal columnist John L. Smith wrote, “On his website, Heller tells us where his heart is at on the issue. He cares deeply, but not enough to turn the wheels of the federal government to roll to the rescue of suffering homeowners… Yes, but what is he going to do about it? ‘We need to re-establish a housing market that has long-term stability in which private capital, not the federal government, is the primary source of mortgage financing. ‘Any financial regulatory reform bill in the future should stop taxpayer-funded bailouts, make further reforms to Fannie Mae and Freddie Mac and help address the struggling housing market which is especially problematic in Nevada.’ In other words, the problem should be left up to the private sector to fix.” [Las Vegas Review-Journal, 7/23/11]

Heller Voted to Protect Wall Street Agenda. In 2010, Heller voted against overhauling the regulation of the financial services industry, to protect consumers from practices that could threaten the economy. The bill aimed to strengthen the government’s ability to prevent future bailouts by giving the government strong new powers to restrain or dissolve large firms who failure could threaten the economy. The overhaul measure would create new regulatory mechanisms to deal with the risks posed by very large financial firms, create a new federal agency to oversee consumer financial products, and force banks and other financial institutions to hold more capital to protect against future financial upheaval.  The bill would bring the $600 trillion derivatives market under federal regulation for the first time and give company shareholders and regulators greater say on executive pay packages. The bill passed, 237-192. [CQ Today, 6/30/10; HR 4173, Vote #413, 6/30/10]

Heller’s Spokesman Said He Would Not Vote To Confirm Richard Cordray As Director Of Consumer Financial Protection Bureau. In December 2011 the Las Vegas Review-Journal wrote, “Heller does not plan to vote for Cordray, spokesman Stewart Bybee said. The Nevadan met with the nominee, ‘and they had a good discussion,’ Bybee said. The problem is not Cordray but how the consumer agency was put together, he said.” [Las Vegas Review-Journal, 12/5/11]

Cordray’s Appointment Critical To Allowing Consumer Financial Protection Bureau To Begin Work Supervising Payday Lenders, Debt Collectors, Credit Reporting Agencies And Private Student Lenders. In December 2011 the Las Vegas Review-Journal wrote, “The Senate has set a vote Thursday to confirm former Ohio Attorney General Richard Cordray as director of the Consumer Financial Protection Bureau, one of the components of the Dodd-Frank law that was enacted last year to reform Wall Street practices. The bureau opened in July but is unable to fully carry out its job without a director, White House officials said. The agency is unable to fully supervise nonbank financial services such as payday lenders, nonbank mortgage companies, debt collectors, credit reporting agencies and private student lenders, the officials said.” [Las Vegas Review-Journal,12/5/11]

Deputy Director of the National Economic Council Brian Deese: “These Institutions Affect The Daily Livelihood Of Tens Of Millions Of Americans. Without A Director To The Agency, You Don’t Have A Cop On The Beat Looking At These Institutions And Taking Steps On Behalf Of Consumers.” [Las Vegas Review-Journal, 12/5/11]


FOR IMMEDIATE RELEASE
December 8, 2011
Contact: Eric Koch
702-675-6711

BERKLEY TO HELLER: STOP THE EXCUSES, STAND UP TO WALL STREET

BLASTS HELLER FOR BLOCKING WALL STREET WATCH DOG THIS AM

WASHINGTON – Today, Nevada Congresswoman Shelley Berkley released the following statement after unelected Senator Dean Heller voted to block Richard Cordray’s nomination to the new Wall Street Watch Dog agency, the Consumer Financial Protection Bureau. The nomination failed 53-45.

“As Nevada’s middle-class families struggle to make ends meet, all we hear from Dean Heller is excuse after excuse for why he can’t hold Wall Street accountable. Time to stop the excuses, Dean! After voting to gut historic Wall Street reform legislation and blocking the new Wall Street Watch Dog agency from doing its job, it’s clear that Dean Heller is willing to throw Nevada’s middle-class under the bus to protect his millionaire Big Bank buddies.”

USA Today Rips Apart Dean Heller’s Argument for Voting Against Wall Street Watch Dog Richard Cordray:

KEY POINT: For example, critics say the consumer bureau somehow isn’t accountable and can do whatever it likes. In fact, it’s the only banking regulator whose rules can be vetoed by the Financial Stability Oversight Council, a group of the government’s top financial regulators. Critics insist it’s dangerous and unusual that the consumer bureau is run by a single director instead of a multimember commission, but that’s how the Office of the Comptroller of the Currency, a key bank regulator, has operated since 1863. Commissions are more easily hobbled by members who seek to undermine them.

The solution, the GOP senators say, is to make the bureau more accountable to Congress. Quick now: Everyone who trusts members of Congress to write rules, with little public scrutiny, that are disliked by the institutions that fund their campaigns, raise your hands. Those would be the same institutions that want the agency weakened.

No hands? Didn’t think so.

http://www.usatoday.com/news/opinion/editorials/story/2011-12-07/Confirm-consumer-protection-bureau-director/51721834/1

Editorial: Confirm consumer protection bureau director

The consumer bureau, created in the wake of the economic devastation of 2008, is a central part of reforms designed to rein in the bad actors who caused so much misery by writing bad mortgages, creating exotic and dangerous financial products, and otherwise preying on the public. It is specifically charged with preventing financial institutions from marketing deceptive products and forcing them to clearly explain the loans, credit cards, mortgages and other products they do offer.

Given the misery the country has suffered from the government’s failure to monitor such practices, it seems a sensible addition. But it is one of the agencies Republicans in Congress most love to hate. They fought its creation, and having lost they’ve made every effort to hobble it. Today, they are expected to reject President Obama’s nominee to head the agency, not because he is objectionable but because the agency is. So they want to starve it, along with other elements of financial reform. “The less we fund those agencies, the better America will be,” Senate GOP leader Mitch McConnell declared in June.

While GOP critics say soothingly that they’re merely trying to make the consumer agency more accountable, they clearly aim to undercut it.

For example, critics say the consumer bureau somehow isn’t accountable and can do whatever it likes. In fact, it’s the only banking regulator whose rules can be vetoed by the Financial Stability Oversight Council, a group of the government’s top financial regulators. Critics insist it’s dangerous and unusual that the consumer bureau is run by a single director instead of a multimember commission, but that’s how the Office of the Comptroller of the Currency, a key bank regulator, has operated since 1863. Commissions are more easily hobbled by members who seek to undermine them.

The solution, the GOP senators say, is to make the bureau more accountable to Congress. Quick now: Everyone who trusts members of Congress to write rules, with little public scrutiny, that are disliked by the institutions that fund their campaigns, raise your hands. Those would be the same institutions that want the agency weakened.

No hands? Didn’t think so.

The new agency won’t be toothless if the Senate fails to confirm its director. It can already regulate the way banks deal with consumers, and in the five months since it opened, the bureau has worked to create simplified new information for mortgages, student loans and credit cards so consumers know what they’re signing up for.

But without a director, the bureau can’t regulate financial institutions such as the non-bank mortgage lenders that contributed to the financial crisis, or payday lenders who lure desperate borrowers into exorbitantly priced loans that can trap them forever.

That would be a shame. Lawmakers should be wary of too much regulation, but if they ignore the need for reasonable restrictions they risk letting the nation get burned all over again.