A court ruling last month cast doubt on the legality of the fledging U.S. consumer bureau and its director. Ever since, opponents have expressed hope that Senator Elizabeth Warren -- the agency’s most ardent champion -- might agree to trim its powers in return for its survival.
Warren signaled that she’s not yet ready to make that trade, although she didn’t rule any option in or out.
“A strong independent consumer agency is good for families and lenders that follow the rules and good for the economy as a whole,” Warren said yesterday in an interview. “I will keep fighting for that.”
Warren, 63, who has styled herself as an anti-Wall Street crusader, was passed over to be the first director of the Consumer Financial Protection Bureau even though she conceived it as a Harvard University professor and organized it as a White House adviser. After that defeat, Warren ran for Senate from Massachusetts and won.
Now, just a few weeks into her new job, she finds herself making the case for the agency all over again -- this time as a senator with a vote on the crucial Banking Committee. In coming weeks or months, the committee and then the Senate will have to decide whether to vote to confirm director Richard Cordray in his post, which would make a legal challenge pointless.
“The consumer agency is powerfully important to millions of American families,” Warren said. “I fought hard for it in the past, and I’m going to keep right on fighting for it.”
President Barack Obama installed Cordray as director in January 2012 using a recess appointment, a procedure that gives presidents the right to bypass Senate confirmation if an urgent vacancy occurs when the Senate is out of session. He took the step after Senate Republicans filibustered the nomination, leaving the agency leaderless for six months and stalling much of its work.
A federal court ruling last month overturned the validity of three recess appointments made at the same time as Cordray, making him vulnerable to a similar legal challenge. If Cordray’s appointment were invalidated, a judge would also have the ability to overturn actions the bureau took under his leadership, including levying fines against credit card firms for improper marketing practices and proposed new standards for mortgage lending and servicing.
Obama renominated Cordray on Jan. 24, setting the stage for a new vote. Senate Banking Committee Chairman Tim Johnson, a South Dakota Democrat, said the nomination battle “shouldn’t have come to this.”