Many Words, Little Action in U.S. Consumer Agency Debate

By Dave Clarke | December 8, 2011

The answer to the Final Jeopardy! question of who will be the first director of the Consumer Financial Protection Bureau will not become known Thursday.

In fact, it may be a while before there is an answer.

Senate Republicans say they have the votes Thursday to successfully scuttle Democrats’ efforts to get former Ohio Attorney General, and Jeopardy champion, Richard Cordray confirmed to lead the new bureau.

Republicans insist their problem is not with Cordray, whom President Barack Obama nominated for the job in July, but with how the bureau is designed.

Before they will let a director be confirmed, Republicans want changes made to the agency. Democrats do not.

That is a prescription for gridlock.

After Thursday’s vote is out of the way, the question will turn to whether a compromise is possible once the news conferences and cable interviews die down.

“Our focus is very much on the vote Thursday,” White House spokesman Josh Earnest said Wednesday. “This is one of the president’s top priorities.”

So far there are no signs the impasse will be broken soon as both parties are fitting the debate over the bureau into their broader political arguments in advance of the 2012 election.

Democrats contend Republicans are casting aside ordinary people to protect big banks and Wall Street from a new cop on the credit card and mortgage beat.

Republicans dismiss the charge and say they are trying to protect the country from more regulatory overreach that will bury Main Street under its weight.

The bureau is one of the signature aspects of the 2010 Dodd-Frank financial oversight law enacted in response to the 2007-2009 financial crisis.

It is charged with overseeing markets for financial products like credit cards and home loans in response to concerns that some shiftless lenders were preying on consumers in the lead up to the financial crisis.

Republicans contend the bureau has too much power and needs to be more carefully watched by Congress.

To this end they want it to be run by a board, rather than a director, have its budget approved by Congress and give other regulators more authority to veto its regulations.

Democrats had supported the idea of having the agency run by a board when it was first being conceived but have rejected Republicans call for changes now, arguing they are veiled attempts to weaken the regulator before can establish itself.

This week Democrats have highlighted the fact that the bureau cannot oversee payday lenders and other “shadow banking” firms until a director is confirmed.

Republicans remain unmoved.

Despite the breathless rhetoric on both sides the consumer agency has begun doing its work.

The agency opened its doors in July and has been working on issues like setting up a consumer complaint website and drafting sample credit card and mortgage forms it hopes will make it easier for borrowers to understand loans.

It also has staff onsite at large banks across the country keeping an eye on the industry.

In fact, Cordray is not unemployed. He leads the bureau’s enforcement division, and may for some time.

(Reporting by Dave Clarke; Editing by Carol Bishopric)

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