Business forum: Fair shake for Obama consumer protection nominee
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President Barack Obama has nominated former Ohio attorney general Richard Cordray to head the Consumer Financial Protection Bureau, but 44 Republican senators have declared that they would oppose any nominee because the bureau's director will have "far too much power."
The senators complain the director will have a five-year term, won't be subject to the congressional appropriation process and will have extensive authority over financial institutions and other businesses.
You might think the bureau is the only federal agency whose head has a five-year term. But no: to pick just one agency, the Office of the Comptroller of the Currency's chief, the comptroller of the currency, also has a five-year term and can be removed only for cause. Similarly, the OCC is funded outside the congressional appropriation process.
Well then, is the OCC less powerful than the Consumer Financial Protection Bureau? While their authority is not congruent (otherwise, we wouldn't need the bureau), the OCC indeed has sweeping power. It regulates and supervises all national banks and supervises federal branches and agencies of foreign banks.
And, unlike the bureau, the OCC's regulations cannot be set aside by the Financial Stability Oversight Council.
The OCC has even outmuscled states; when states passed laws to prevent predatory lending in the years preceding the subprime crisis, it announced the laws did not apply to the banks it regulated.
It's not that the issue of the bureau has arisen because the president has nominated a director and senators will address the comptroller of the currency when that post falls vacant.
The last comptroller, John Dugan, left office last summer, and the president recently nominated a new one. Yet the senators haven't said they'd oppose confirming a new comptroller until that office's powers are constrained; in fact, when John Dugan was confirmed in 2005 by a Republican-controlled Senate, his confirmation was so uncontroversial it was decided on a voice vote.
Perhaps the answer for the differing treatment of the two agencies lies in their politics.
The senators should recognize that if they want to challenge Congress' decision in structuring the bureau as it has, the appropriate way to do so is to pass legislation, not hold up filling a job that is needed and amply supported by precedent.
First Published August 13, 2011 12:00 am