Well, he made good on one promise for once.
President Obama has defied the Senate’s rejection of Dodd-Frank czar Richard Cordray and recess-appointed — just as he threatened last month and just as Soros operatives pushed him to do for months. The White House trumpeted the strong-arm move this morning.
The President nominated Mr. Cordray last summer. Unfortunately, Republicans in the Senate blocked his confirmation. They refused to let the Senate go forward with an up or down vote. It’s not because Republicans think Cordray isn’t qualified for the job, they simply believe that the American public doesn’t need a watchdog at all. Well, we disagree.
And we can’t wait for Republicans in the Senate to act. Now, you might hear some folks across the aisle criticize this “recess appointment.” It’s probably the same folks who don’t think we need a tough consumer watchdog in the first place. Those critics might tell you that Wall Street should write their own rules. Or you might hear them say the American people are better off when everyone is left to fend for themselves. Again, we disagree with those critics.
Refresh your memories on Cordray and the expansive new regulatory powers he will now wield here.
Senate Republicans have vowed to block Cordray or any other candidate for the job until key reforms are made to the sweeping law and its half-billion-dollar enforcement arm, the Consumer Financial Protection Bureau. The common-sense changes include subjecting the CFPB to the congressional appropriations process instead of the Federal Reserve; restoring independent judicial review; ensuring that it takes into account the impact of new rules on the safety and soundness of
financial institutions; and creating a bipartisan oversight board instead of a single director to run the agency.
Obama himself supported such a panel — before he opposed and demagogued it. As it stands, the bureau remains under the Treasury Department. The minute a director is sworn in, the agency will transfer to the fed for administrative purposes, but will effectively have free rein. The Fed’s authority over it is illusory. And it would be impossible for the Dodd-Frank czar to be removed by a change of administration because his term is five years and his tenure protected.
While crusading as a consumer watchdog who’ll take on Wall Street, Cordray (whom voters booted from the Ohio Attorney General’s Office last fall) is tight with securities class-action lawyers. As Daniel Fisher at Forbes Magazine reported, Cordray has a record of “taking money from lawyers who profit from private litigation that often follows closely on the heels of government investigations.” In other words: Exactly the kind of cozy, crony relationships that created our financial crisis in the first place.
As for Cordray’s ability to police shady behavior by others, his own record as Ohio Attorney General raises more doubts than it allays. When local papers spotlighted shady campaign account-shifting involving nearly $800,000, even a liberal Ohio Citizen Action leader responded: “I’m sure he’s following the letter of the law. It’s certainly not following the spirit of the law.”