By PHILLIP LEE
Things are clearer at the Consumer Financial Protection Bureau.
That’s because Richard Cordray was confirmed by the Senate and “officially” appointed as director of the agency.
Cordray, who was confirmed by a vote of 66-34, has been director since January 2012 via recess appointment. Since the duration of a recess appointment is only for a year, Cordray was re-nominated by President Barack Obama this past January.
The Financial Service Centers of America, the Community Financial Services Association and the Online Lenders Alliance stressed that they will continue to work with Cordray and the CFPB.
“We’ve considered Richard Cordray our director for the past two years since the CFPB was created,” says William Sellery, executive director of FiSCA. “We will certainly continue working with the CFPB to ensure their regulations recognize the role of small dollar credit products and our members.”
“CFSA and its members have had a productive relationship with Director Cordray and his staff since the CFPB’s inception, and we look forward to continuing our dialogue,” CFSA says in a statement.
“Director Cordray and his staff have always been open to meeting with and listening to CFSA and its members, and we find that encouraging in terms of our relationship and ongoing work with the Bureau.
“Since the CFPB’s creation, OLA and its members have enjoyed a cooperative and productive relationship with the bureau. Our members meet with Director Cordray and his bureau chiefs regularly to educate them about the short term, online lending industry and the consumer demand that drives its growth,” said Lisa McGreevy, president and CEO of OLA.
“The CFPB was created to confront 21st Century financial challenges. Consumers are increasingly using 21st Century technology to pay bills, access credit and purchase goods and services online and our industry is using technological innovation to meet their short term lending needs. We are working with the CFPB to ensure the regulations recognize the innovations in the financial services industry used by industry and consumers.”
Cordray was originally tabbed for the position in July 2011, but his confirmation was blocked by Senate Republicans. His confirmation was stalled not necessarily because he was unqualified, but because legislators had problems with the CFPB as an agency in general.
President Obama decided to use his recess appointment privileges and installed Cordray as director of CFPB in January 2012.
Cordray was thrust into controversy this past year when a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit handed down a decision that President Barack Obama’s National Labor Relations Board appointments “were constitutionally invalid” because the Senate was not in recess. Those appointments were made at the same time Cordray was appointed.
The reason it may affect Cordray and the CFPB? Cordray was also a recess appointment, made on the same date as the NLRB members.
In the published report, the lawsuit was brought by a soft drink bottler who lost a union dispute before the NLRB. The company claimed that the president had no power to appoint the new NLRB members, and that the subsequent action by the board therefore lacked legitimacy.
If the ruling stands and the appointments were nullified, the results would be that all the actions since the members were on the board would be voided.
Critics of the CFPB have said that ruling would apply to Cordray and void any actions and regulations that he put forth as well.
Since then, the Senate worked out an agreement to confirm President Obama’s executive nominations. However, the lawsuit on the recess appointments has been appealed and headed to the Supreme Court of the United States.
There still is a pending lawsuit filed by State National Bank of Big Spring, Texas, against the CFPB. The bank, along with two organizations, is challenging the constitutionality of the agency.