September 8, 2011
GOP lawmakers are not lovin’ the new Consumer Financial Protection Bureau, so much so that 44 of them have promised not to approve any directorial nominee until changes to the organization’s leadership structure and regulatory powers are made.
Their animosity towards the agency led them to say some pretty silly statements at Tuesday’s initial nomination hearing for CFPB candidate Richard Cordray, TIME Magazine’s Martha White writes. Here are the three she feels were the most ridiculous:
1) “The director will be virtually free of any constraints on his authority,” he claimed. “It’s only a matter of time before this concentration of power is abused or misused.” – Senator Richard Shelby (R-Ala.)
Republican Senators are advocating that the agency should be run by a five-member panel as opposed to putting power in the hands of a single leader. Yet White points out both the Federal Housing Finance Agency and Office of the Comptroller of the Currency have only one director. “For its part, the OCC has been described variously as an ‘enabler’ of bad bank behavior and ‘asleep at the wheel,’ so a single director doesn’t necessarily lead to heavy-handed regulation,” comments White.
2) “We’re creating an environment … encouraging people to default.” – Senator Bob Corker (R-Tenn.) in response to Cordray’s belief that credit-card late fees should have limits established by the government.
“Corker’s response is disingenuous, at best, in its suggestion that prohibiting card companies from charging huge penalties is going to turn credit cardholders into scofflaws, en masse,” writes White.” In fact, the percentages of people not paying their credit cards has actually been on a downward trajectory since the CARD Act was implemented.”
3) “It’s not typical to have a political activist … announced to be head of a national organization.” – Senator Corker
Cordray was actually one of the first champions for homeowners who were foreclosed on, helping them to sue the mortgage companies for fraud. Corker also claimed that Cordray’s “earlier contemplation of a run for governor would make him an inappropriate choice for director,” recaps White. Cordray, though, claims he never intended to run for office.
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