MBA, Chamber Of Commerce Slam Cordray Appointment

Written by Phil Hall
on January 05, 2012 No Comments
Categories : Residential Mortgage

10646_richardcordray_square.jpg MBA, Chamber Of Commerce Slam Cordray Appointment The Mortgage Bankers Association (MBA) and the U.S. Chamber of Commerce reacted with cold hostility to President Obama's recess appointment of Richard Cordray as the first director of the Consumer Financial Protection Bureau (CFPB), and Republicans in Congress have questioned the legality of the appointment.

MBA President and CEO David H. Stevens, in an email sent to the trade association's membership, pointedly failed to congratulate Cordray on his new position and warned that the recess appointment would only create a new round of partisan conflict.

‘[This] action promises to further exacerbate the political tensions between Democrats and Republicans,’ wrote Stevens, who served as Obama's commissioner of the Federal Housing Administration before joining the MBA in April 2011.Â

While stating that the MBA has ‘taken steps to establish a positive working relationship with the CFPB's leadership, including my own personal outreach to Mr. Cordray,’ Stevens added that the trade group supported the Senate Republican position of reconfiguring the CFPB's organizational schematics and federal accountability.Â

‘MBA continues to support the need for important structural changes to the CFPB, namely that the director's position be replaced by a five-person commission, that the CFPB be subject to the normal congressional appropriations process, that CFPB rules be subject to review by the Office of Management and Budget, and that votes to overturn CFPB decisions by the Financial Stability Oversight Council take a simple majority rather than a two-thirds vote,’ Stevens continued. ‘In short, the CFPB's influence on the financial services sector will be unprecedented, and MBA will continue to urge that appropriate institutional checks and balances be in place to ensure that the CFPB's authority is used wisely and judiciously.’Â

Tom Donohue, president and CEO of the U.S. Chamber of Commerce, expressed his concerns about the Cordray recess appointment on his organization's website.

‘To say we are disappointed in the move by the president today would be a gross understatement,’ Donohue wrote. ‘This controversial appointment is unprecedented, constitutionally questionable, and puts the authority of the director and the validity of the bureau's work in legal jeopardy. What's more, it ignores repeated calls to reform the bureau by restoring basic checks and balances. The Senate has already made it clear that structural changes are needed before a director can be confirmed, and the executive branch has defied convention to undermine that process.

‘Today's move by the president robs Congress of its one opportunity to provide a check on the CFPB's broad and largely undefined reach,’ Donohue continued. ‘The American people deserve the right to know how this agency will work and what it plans to do with half a billion dollars in annual funding. The president had a choice to work with Congress to implement the necessary reforms for this agency. Instead, he chose a political maneuver that ignores the advice and consent power of the Senate, harms consumers and ensures that the CFPB's authority will be challenged and resolved by the courts.’

The legality of the recess appointment – which was made even though Congress was in pro forma sessions – was raised by Sen. Mitch McConnell, R-Ky.

‘Although the Senate is not in recess, President Obama, in an unprecedented move, has arrogantly circumvented the American people by 'recess' appointing Richard Cordray as director of the new CFPB,’ said McConnell in a press statement. ‘This recess appointment represents a sharp departure from a long-standing precedent that has limited the president to recess appointments only when the Senate is in a recess of 10 days or longer. Breaking from this precedent lands this appointee in uncertain legal territory, threatens the confirmation process and fundamentally endangers the Congress' role in providing a check on the excesses of the executive branch.’

Rep. Jeff Landry, R-La., concurred with McConnell and announced that he would seek to void the appointment.

‘Since the Senate has advised the president against making Cordray's nomination and has not given its consent on his appointment and with the House meeting just yesterday to keep Congress in session, the president's appointment, of Cordray can only be considered an abuse of the recess appointment process,’ declared Landry. ‘I will not stand for this violation of our Constitution and will be introducing legislation to prevent Cordray's appointment from going forward until the court rejects his appointment on its unconstitutionality.’

Rep. Patrick McHenry, R-N.C., chairman of the House Oversight Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs, accused the president of allowing ‘his Chicago political campaign to make his Washington policy decisions.’ He added that Cordray has been requested to testify before his subcommittee at a Jan. 24 hearing.

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