Senate Republicans Block Agency Chief For Credit Task Force
Consumer Financial Protection Bureau struggles with ‘do-little’ GOP
If a scraping sound is heard right now it’s likely the pitch forks of the remaining Occupy Wall Street activists, who on Thursday witnessed all but two Senate Republicans block the confirmation of President Obama’s pick of a director to head the Consumer Financial Protection Bureau.
In case that doesn’t ring a bell, the CFPB is a new government shop tasked with drafting financial reforms that restrict prepaid card fees, junk credit card hawkers and student loan sharks.
This latest move by Republicans to undermine any and all of Obama’s pet projects might easily be interpreted as a subtle approval of status quo on Wall Street and in the darkest corners of the consumer financial products market.
In other words, Republicans don’t appear serious about protecting hard-working, cash-strapped Americans. Besides, only really poor, irresponsible people get payday loans at check cashing stores. Right?
All joking aside, 20 million Americans interact with payday lenders annually, according to the Center for Responsible Lending. These are considered non-bank financial institutions that have had very little oversight.
Currently, the agency can enforce Congress-approved reforms, with some regulation on the aforementioned “bad guys.” Those regulations are tame compared to what Obama and agency creator Elizabeth Warren had in mind.
On Thursday, Obama expressed frustration over the reasons Republicans blocked the confirmation of Richard Cordray, the CFPB’s current director of enforcement.
“My hope and expectation is that the Republicans who blocked this nomination come to their senses,” Obama said in remarks at the White House.
“And I know that some of them have made an argument, ‘Well, we just want to sort of make some modifications in the law.’ Well, they’re free to introduce a bill and get that passed.”
To be fair to Republicans, Obama’s statement flies in the face of a contentious year with the agency’s biggest cheerleader, Warren. Last year, the Obama administration reportedly passed on Warren as a pick for CFPB chief largely because of her fiery rhetoric on the subject.
In an effort to tone it down a bit, Obama went for the seemingly less confrontational Cordray, even though he has a reported spicy reputation with banks and lobbyists. Perhaps in symbolically muzzling Warren’s war cry, the administration sent the message that it, too, was half-heartedly serious about reigning in the “bad guys.” And there, Republicans saw their opening to take it down.
What will be the way forward for the Obama administration and for American consumers?
In time, voters will reward the administration for being on the right side of the issue, says Brian Deese, deputy director of the National Economic Council.
“I think this issue is resonating,” Deese told reporters Thursday. “We’ve seen what happens when you get this wrong. Because you don’t have these controls in place, you have a housing crisis.”
“People want to have confidence about the accuracy of the credit report a potential employer” sees, Deese added.
Amen to that. But someone’s got to evangelize Senate Republicans.