December 09, 2011

Cordray nomination blocked for now

Senate supporters of Richard Cordray's nomination as director of the Consumer Financial Protection Bureau failed to get the votes they needed to block a filibuster Thursday.

The vote was a procedural one to set a limit on debate. It required 60 affirmative votes to pass, but the vote tally was 53-45, with one senator voting "present." If the Senate remains in pro forma session, as is expected over the holiday break, the president will also be unable to make a recess appointment.

Cordray's nomination remains stalled as 44 Senate Republicans continue to block any nominee until there are changes in the CFPB structure, and that would require changes to the Dodd-Frank Act.

A bill to accomplish those, H.R. 1315, passed the House in July. It is strongly supported by NAFCU, the only credit union trade group that opposed placing credit unions, which did not cause the financial crisis, under CFPB oversight.

H.R. 1315 would change the leadership of the CFPB from a single director to a five-person commission, make it less difficult for the Financial Stability Oversight Council to overturn a CFPB rule that may harm a depository institution's safety and soundness and subject CFPB funding to the appropriations process.

The Dodd-Frank Act gave the CFPB examination and enforcement authority over institutions with $10 billion or more in assets. Three credit unions are above that limit, and more will likely get there because the limit is not indexed to inflation.