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Jeb Hensarling on Richard Cordray



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President Obama’s attempt to circumvent the Senate by unilaterally appointing Ohio politician Richard Cordray to the Consumer Financial Protection Bureau may have been premised on his expectation that he would get away with it. If so, he seems to have miscalculated, because the other two branches of government are providing him with a Sesame Street demonstration of the concept of “checks and balances.”

Senate Republicans wrote in February that they would “continue to oppose the consideration of any nominee, regardless of party affiliation, to be the CFPB director until key structural changes are made to ensure accountability and transparency at the Consumer Financial Protection Bureau.” (Their criticism of the CFPB’s unaccountable structure is echoed in a lawsuit brought by eleven states and a small Texas bank and the Competitive Enterprise Institute challenging the constitutionality of Dodd-Frank.)

But the most significant rebuke so far came from the judicial branch. In January, the D.C. Circuit held that the president’s appointments to the National Labor Relations Board — which occurred alongside the Cordray appointment — were invalid, because they “eviscerate[d] the Constitution’s separation of powers” while “demolish[ing] checks and balances.” As former White House Counsel Boyden Gray explained, “the D.C. Circuit decision is binding on the CFPB unless reversed by the Supreme Court.”

Representative Jeb Hensarling, chairman of the House Financial Services Committee, agrees. Yesterday he released a statement announcing that his committee would not accept testimony from Cordary until he is validly appointed to the CFPB:

The House Financial Services Committee cannot legally accept testimony from Richard Cordray on the Consumer Financial Protection Bureau’s (CFPB) semi-annual report until he is validly appointed as the bureau’s director, said Rep. Jeb Hensarling (R-TX), the committee’s chairman. However, the committee will continue to conduct rigorous oversight of the CFPB. . . .

“The court’s unanimous ruling makes it clear that there is no legally-appointed director of the CFPB at this time,” said Chairman Hensarling. “By law, the committee can receive this testimony only from a director who is appointed in accordance with the Constitution
and the Dodd-Frank Act, which created the bureau.” . . .

“No other regulator has more influence over the daily financial lives of Americans,” he continued. “Dodd-Frank gives the CFPB director the power to decide what financial products and services will – and will not – be available to American consumers and how much they will have to pay for them. 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? No bureaucrat should have so much control over the financial destiny of Americans, particularly one who is completely insulated from the types of checks and balances that apply to other government agencies.”

Three cheers for Chairman Hensarling.



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