President Obama announced that he is using a recess appointment to name Richard Cordray as the director of the Consumer Financial Protection Bureau. The announcement came during a speech on the economy in Cordray's home state of Ohio this afternoon.
Senate Republicans have blocked a vote on Cordray's nomination, insisting on changes to how the bureau is structured and for the CFPB's budget to be subject to congressional approval.
Cordray is expected to take over the job later in the week. Because it is a recess appointment, he can only serve for the next two years, covering the length of the Senate's session without being confirmed by the full Senate.
"I'm appointing Richard as America's consumer watchdog. That means he'll be in charge of one thing: looking out for the best interests of American consumers," the President said during his remarks. "His job will be to protect families like yours from the abuses of the financial industry. His job will be to make sure you've got all the information you need to make important financial decisions. Right away, he'll start working to make sure millions of Americans are treated fairly by mortgage brokers, payday lenders and debt collectors."
With the appointment of Cordray, the Bureau will be able to begin supervising non-bank entities such as pay day lenders, debt collectors, and non-bank firms that were faulted for triggering the financial crisis three years ago. It can also begin writing rules in earnest, which it has been hesitant to do without a full-time director.
White House press secretary Jay Carney hinted at the recess appointment during a press briefing yesterday, when he told reporters, the President "will be focused on the economy and on what he can do as President to deliver on his promise to do everything he can to help the middle class, grow the economy, and create jobs, working with Congress collaboratively where we can and either with the private sector or through executive action where we must.”
Republicans had tried to block any recess appointments by refusing to adopt a resolution to formally adjourn, and senators have appeared every three days for a brief pro-forma session—gaveling in and then out of session—in an attempt to deny the President any opportunity to make a recess appointment. He had a brief window between sessions of the 111th Congress to the transition to the 112th Congress, which he declined to use. Instead, he concluded that he had the power to make the appointment during the pro-forma session, which Senate Republicans are likely to challenge.
"I nominated Richard for this job last summer. And yet, for almost half a year, Republicans in the Senate have blocked his confirmation. They've refused to even give Richard and up-or-down vote," the President said. "The only reason Republicans in the Senate have blocked Richard is because they don't agree with the law setting up the consumer watchdog. They want to weaken it," he continued.
Indeed, some Republican Senators are already griping about the news. “Although the Senate is not in recess, President Obama, in an unprecedented move, has arrogantly circumvented the American people by ‘recess' appointing Richard Cordray as director of the new CFPB,” Senate Minority Leader Mitch McConnell said in an official statement. “This recess appointment represents a sharp departure from a long-standing precedent that has limited the President to recess appointments only when the Senate is in a recess of 10 days or longer. Breaking from this precedent lands this appointee in uncertain legal territory, threatens the confirmation process and fundamentally endangers the Congress's role in providing a check on the excesses of the executive branch.”