One of Dodd-Frank's divine gifts to the American people was a new financial regulatory agency: the Consumer Financial Protection Bureau (CFPB). Until now, it hasn't been able to insert itself into our economy; it is required to have a leader before it can exercise its powers, and in the Senate confirmation vote, Republicans had successfully blocked President Obama's nominee, Richard Cordray.
But today marks another presidential power grab: President Obama is expected to appoint Richard Cordray to head the controversial agency without Congressional approval. While the Senate is in a pro forma session -- meaning they aren't conducting any business, but they ARE in session -- the president is slated to annouce Cordray's new position at 1:15PM from Cleveland, OH.
Republicans blocked the appointment last month over concerns that the regulatory agency has too much power -- power that can only be exercised if it has a leader.
At stake are vast new powers the Consumer Financial Protection Bureau can't wield without a director. For example, the bureau can't regulate financial products from non-banks, including student loan providers, debt collectors, payday lenders and check cashers.
Without a chief, the bureau also can't regulate mortgage originators and servicers, which played a big role in the financial crisis by providing subprime mortgages to families who couldn't afford them.
The move is sure to rattle Republicans, who have vowed since May to block confirmation of any director unless they get structural changes to the bureau, which was formed as part of the Wall Street reform law passed last year.
Republicans had few qualms about Cordray himself; instead, they fear the consequences of empowering yet another financial regulatory agency. It's another method for Obama's administration to micromanage the nation's financial industry -- as Erika pointed out, the CFPB has even been tasked with teaching you how your credit card works. Yes, because that's why the Founding Fathers created our government: to teach us financial management 101!
Once more, it's to hell with Congress -- Obama knows best.
Update: Obama has also appointed three new members to the National Labor Relations Board, in a move that will empower unions and put businesses on the defensive. According to the Washington Post, the new members are Sharon Block, Terence Flynn, and Richard Grifin.
And for all those pointing out that Bush had 61 recess appointments at this point in his presidency, I would reiterate that technically, the Senate is not in recess right now. Furthermore, by holding these pro forma sessions, Senate Republicans are using the same tactic Harry Reid used to block a George W. Bush nominee in 2007.
Funny, Reid seems to be OK with Obama stepping on his power this time.
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