No fireworks at Cordray nomination hearing

more+
less-
more+
less-

Not only did the Senate Banking Committee hearing this morning on Richard Cordray’s nomination to be CFPB Director produce no fireworks, there were moments when Committee members seemed to forget he was in the hearing room. Mr. Cordray appeared before the Committee together with Mary Jo White, on whose nomination to head the SEC the Committee simultaneously conducted a hearing. Most of the Committee’s questions were directed at Ms. White, with several Committee members not asking Mr. Cordray any questions.

Democratic Committee members predictably used the hearing as an opportunity to praise Mr. Cordray and the CFPB, with their questions generally in the form of softballs that allowed Mr. Cordray to talk about various CFPB initiatives such as “Know Before You Owe.” While not throwing softballs, Republican Committee members apparently decided not to be confrontational. The only Republican reference to the D.C. Circuit’s Canning v. NLRB decision was in the introductory remarks of Senator Crapo, the Ranking Minority Member. Senator Crapo described the structural changes to the CFPB sought by Republicans and stated that, consistent with Canning, he believes Mr. Cordray’s recess appointment was unconstitutional.

The only other Republican Senator to somewhat challenge Mr. Cordray was Senator Johanns, who raised concerns about a lack of accountability for the approximately $150 million spent by the CFPB in FY 2012 on contracts and services. (Republican Senator Coburn commented that federal agencies are required to publicly disclose information on contract awards on USAspending.gov. Although Mr. Cordray initially did not know whether CFPB data was available on that website, he subsequently indicated that it was.)

Perhaps the reserve shown by the Republican Committee members reflects their confidence in the ability of Republican Senators to block Mr. Cordray’s nomination while the battle over the CFPB’s structure continues. In the meanwhile, Mr. Cordray will need to deal with the fallout from Canning. In his opening remarks, Mr. Cordray stated “for consumers who have been deceived by credit card companies, we have worked closely with our fellow regulators to put $425 million back in the pockets of six million consumers.” Although the words “with more to come” appeared at the end of that statement in Mr. Cordray’s prepared remarks released before the hearing, he left those words off in his remarks to the Committee. While Mr. Cordray may have omitted those words so as not to be provocative, he may also have been unwittingly prophetic. Until the cloud over his recess appointment is resolved, he may find CFPB targets unwilling to sign off on settlements requiring them to pay substantial sums in restitution.