Republicans intensify pressure to limit powers of consumer agency

WASHINGTON — Republicans have stepped up their pressure to limit the wide-ranging powers of the nation’s watchdog over consumers’ money matters.

The head of a key House committee overseeing the Consumer Financial Protection Bureau said he would no longer accept the testimony of Richard Cordray, the bureau’s director, before his panel because he doesn’t believe Cordray was legally appointed to his post.

Cordray, who delivered his semi-annual report to the Senate Banking Committee on Tuesday, was set to do the same in coming weeks in the House, as required by law.

But Rep. Jeb Hensarling, R-Texas, chair of the House Financial Services Committee and a leading critic of the bureau, contended that President Barack Obama’s recess appointment of Cordray last year was unlawful because the Congress, technically, was not in recess.

The bureau has been under attack by congressional Republicans and other opponents since it was created in 2010, over the GOP’s strenuous objections, as the centerpiece of the Dodd-Frank overhaul of financial regulations.

Republicans have tried since to rein in the bureau’s authority, arguing that the bureau was too powerful and posed a threat to the health of banks and the rights of consumers. Nearly all Senate Republicans have blocked the confirmation of any nominee to the post until the administration agrees to curtail the bureau’s authority.

“No other regulator has more influence over the daily financial lives of Americans,” Hensarling said. “How is it fair to American consumers that one unelected, unaccountable bureaucrat in Washington has the power to decide what kind of mortgage, car loan or credit card they can or cannot have?”

The White House and Democrats, backed by consumer groups, said the bureau is needed to prevent a repeat of the subprime mortgage meltdown and to keep financial institutions from taking advantage of average Americans.

Rep. Maxine Waters, D-Calif., the top Democrat on the Financial Services Committee, said Cordray should be allowed to testify. If not, she said, she was prepared to use committee rules, which allow the minority to call witnesses at hearings, to let Cordray appear.

One of the main Republican complaints about the bureau is that Congress does not have enough oversight over its activities because it is funded directly by the Federal Reserve, outside the appropriations process.

Ed Mierzwinski, consumer program director at the U.S. Public Interest Research Group, said that GOP stance made Hensarling’s decision to ban Cordray ironic.

“They’re claiming they’re somehow going to conduct oversight without talking to the boss,” Mierzwinski said of House Republicans. His group strongly supports the bureau.

Hensarling said his committee “intends to continue to conduct rigorous oversight of the CFPB’s activities” and will accept testimony from other bureau officials.

Hensarling, who took over this year as chair of the committee, also has challenged the authority of Obama to make the appointment during a congressional break, which Republicans said was not an official adjournment that would enable recess appointments.

“Absent contrary guidance from the United States Supreme Court, you do not meet the statutory requirements of a validly serving director of the CFPB and cannot be recognized as such,” Hensarling wrote to Cordray on Monday.

In questioning the legality of Cordray’s appointment, Republicans also are raising doubts about the legitimacy of the bureau and its actions, Mierzwinski said.

“Chairman Hensarling has made a political move to attempt to call the agency into question, but the fact is the agency is out there protecting the public,” Mierzwinski said.

In January, a federal court invalidated three other recess appointments Obama made on the same day to the National Labor Relations Board, putting Cordray’s future in doubt as well. The NLRB is appealing the decision to the Supreme Court.

In addition, a Texas bank and two advocacy groups last year filed their own lawsuit in federal court challenging the agency’s legitimacy. That suit is pending.

Democrats came to Cordray’s defense. Sen. Elizabeth Warren, D-Mass., who helped launch the bureau, said the opposition by Republicans wasn’t about his qualifications.

“This is about a minority that doesn’t want a watchdog that will keep an eye on the big banks to make sure they don’t cheat their customers,” she said.

Talk to us

More in Local News

An example of the Malicious Women Co. products (left) vs. the Malicious Mermaid's products (right). (U.S. District Court in Florida)
Judge: Cheeky candle copycat must pay Snohomish company over $800K

The owner of the Malicious Women Co. doesn’t expect to receive any money from the Malicious Mermaid, a Florida-based copycat.

A grave marker for Blaze the horse. (Photo provided)
After Darrington woman’s horse died, she didn’t know what to do

Sidney Montooth boarded her horse Blaze. When he died, she was “a wreck” — and at a loss as to what to do with his remains.

A fatal accident the afternoon of Dec. 18 near Clinton ended with one of the cars involved bursting into flames. The driver of the fully engulfed car was outside of the vehicle by the time first responders arrived at the scene. (Whidbey News-Times/Submitted photo)
Driver sentenced in 2021 crash that killed Everett couple

Danielle Cruz, formerly of Lynnwood, gets 17½ years in prison. She was impaired by drugs when she caused the crash that killed Sharon Gamble and Kenneth Weikle.

A person walks out of the Everett Clinic on Thursday, Sept. 7, 2023 in Everett, Washington. (Olivia Vanni / The Herald)
The Everett Clinic changing name to parent company Optum in 2024

The parent company says the name change will not affect quality of care for patients in Snohomish County.

Tirhas Tesfatsion (GoFundMe) 20210727
Lynnwood settles for $1.7 million after 2021 suicide at city jail

Jail staff reportedly committed 16 safety check violations before they found Tirhas Tesfatsion, 47, unresponsive in her cell.

Lynnwood man arrested, released on $25K bond after road rage shooting

Deputies arrested the suspect, 20, for investigation of first-degree assault on Tuesday.

Mt. Baker visible from the summit of Mt. Dickerman on a late summer day in 2017. (Caleb Hutton / The Herald)
Hornets pester hikers on popular Mountain Loop trails

“You cannot out run the stings,” one hiker wrote in a trip report. The Forest Service has posted alerts at two trailheads.

Emergency responders surround an ultralight airplane that crashed Friday, Sept. 22, 2023, at the Arlington Municipal Airport in Arlington, Washington, resulting in the pilot's death. (Ryan Berry / The Herald)
Pilot dead in ultralight plane crash at Arlington Municipal Airport

There were no other injuries or fatalities reported, a city spokesperson said.

Patrick Russell, left, Jill Russell and their son Jackson Russell of Lake Stevens enjoy Dick’s burgers on their way home from Seattle on Friday, Sept. 22, 2023 in Edmonds, Washington. The family said the announcement of the Dick’s location in Everett “is amazing” and they will be stopping by whenever it opens in 2025. (Olivia Vanni / The Herald)
Dick’s Drive-In announces new south Everett location

The local burger legend announced Friday it plans to open the south Everett location on Center Road in 2025.

Most Read