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Cordray confirmation another victory for Public Citizen’s consumer protection efforts

A photograph of Richard Cordray
Richard Cordray, director of the Consumer Financial Protection Bureau

This week, the Senate finally confirmed Richard Cordray as director of the Consumer Financial Protection Bureau.

It’s a victory we’ve been working toward for a long time.

For two years, a bloc of Senate Republicans held up Cordray’s confirmation with a filibuster threat based not on their dislike of Cordray, but on their opposition to the consumer protection agency he was nominated to lead.

Sen. Tom Coburn (R-Okla.) – one of the obstructionists – even praised Cordray during his nomination hearing earlier this year: “I think you have done a wonderful job so far in carrying out your duties.”

Grassroots pressure from activists all around the country proved to be too much for this obstructionist bloc. Activists refused to let up in calling for Cordray’s confirmation and even backed the idea of Sen. Harry Reid (D-Nev.) employing the so-called “nuclear option” to change Senate rules so the vote on Cordray and other nominees could have proceeded with a simple majority of 51 votes (rather than the 60 votes required to overcome the GOP’s filibuster threat).

On Tuesday, 17 Senate Republicans, led by Sen. John McCain (R-Ariz.), broke the obstructionist blockade and voted to allow Cordray to come up for a floor vote. In the end, 12 Republicans joined the 54 Democrats in voting for Cordray’s confirmation.

Now that Cordray is confirmed, he can serve as director for a full term of five years, starting this week.

The CFPB, under Cordray, can do a whole lot of good for consumers in five years.

It was just three years ago when President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which created the CFPB and initiated numerous other financial reforms, into law.

In 2009, Public Citizen was fighting for the creation of a strong CFPB.

When Sen. Chris Dodd (D-Conn.) announced his imminent retirement, we organized a petition campaign of 45,000 activists calling on Dodd to stand with the public and not cave in to demands from bank lobbyists.

We won.

After Dodd-Frank’s passage in 2010, we called on Obama to nominate consumer advocate Elizabeth Warren to lead the agency. More than 30,000 activists agreed.

Delivering petitions to Sen. Chris Dodd's office in 2010.
Public Citizen and allies deliver petition in 2010 from 45,000 activists calling on Sen. Chris Dodd (D-Conn.) to stand strong on financial reform.

And while we were disappointed that Warren was not nominated, we were heartened that the president’s nominee was another tough consumer advocate, Richard Cordray, formerly Ohio’s attorney general.

We called on the Senate to confirm Cordray quickly so that the CFPB could assume its full powers and truly begin the work of reining in Wall Street rip offs and predatory banking.

Tens of thousands of Public Citizen activists called and emailed their senators to demand that they confirm Cordray.

But right-wing obstructionists, led by Sens. Richard Shelby (R-Ala.) and Minority Leader Mitch McConnell (R-Ky.), had other plans.

Not only would they exploit the filibuster threat to block Cordray, they also used parliamentary tricks to prevent Congress from officially going into recess – thereby setting themselves up to say that Obama could not appoint Cordray during the recess because Congress was actually still in session.

This scheme won its right-wing architects the ridicule of The Daily Show with Jon Stewart.

And, in response, Public Citizen laid out the legal argument that McConnell and Shelby were flat out wrong, and that Obama did, in fact, have the authority to make such a recess appointment. We sent a letter to the president urging on him to do just that.

In January 2012, after exhaustive attempts to move Cordray through the traditional Senate confirmation process, Obama used a recess appointment to put Cordray in charge of the CFPB.

Under Cordray, the CFPB has been unafraid to flex its regulatory muscle and intervene to stop the unfair and reckless practices of corporate financial interests. In just two years, the CFPB has made several important contributions to the lives of average Americans. It has:

• Returned nearly half a billion dollars to consumers cheated by credit card companies;

• Moved to end the era of mortgages designed to rake in up-front fees before they self-destruct;

• Stood up for students and families trapped in high-cost private education loans;

• Protected military families against illegal foreclosures and deceptive lending practices and

• Begun to investigate forced arbitration clauses in contracts for consumer financial products or services.

But a recess appointment lasts only two years. Cordray was soon re-nominated, and the fight to confirm him began anew.

And, once again, tens of thousands of Public Citizen activists called and emailed their senators, demanding they confirm Cordray.

We now know how this story ends.

“We are happy that members in the Senate have listened to, and followed the will of, their constituents,” said Micah Hauptman, financial policy counsel for Public Citizen’s Congress Watch division on the day of Cordray’s confirmation. “The public clearly supports efforts to protect consumers from abusive practices by financial institutions, and by moving forward with Cordray’s nomination, the Senate will allow the CFPB to do so.”

Of course, this defeat isn’t going to make our opponents among Wall Street’s greediest and most predatory go away. Bank lobbyists will lick their wounds and move on to the next battle.

And, thanks to Public Citizen’s more than 300,000 activists and supporters, we’ll be ready to take them on again and again.

Rick Claypool is online director for Public Citizen’s Congress Watch division. Follow him on Twitter at @RickClaypool.

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