IE 11 is not supported. For an optimal experience visit our site on another browser.

Richard Cordray's uncertain future

President Obama made two interesting personnel announcements yesterday, nominating Mary Jo White to lead the Security and Exchange Commission, and Richard

President Obama made two interesting personnel announcements yesterday, nominating Mary Jo White to lead the Security and Exchange Commission, and Richard Cordray to continue leading the Consumer Financial Protection Bureau. The former is fascinating in its own right -- White's legal career makes her an interesting choice for the SEC -- but it's worth pausing to ponder Cordray's fate.

You'll recall that President Obama and congressional Democrats created the CFPB in 2010, over the fierce opposition of congressional Republicans and financial industry lobbyists. Elizabeth Warren, now a Democratic senator, helped establish the office, and Obama tasked Cordray with leading the agency.

But that proved to be trickier than it should have been. When Senate Republicans refused to allow a confirmation vote on Cordray's nomination, Obama gave him a recess appointment, along with new members of the National Labor Relations Board. This morning, a federal court said the NLRB appointments were improper since Congress wasn't technically in recess, and though the case didn't involve Cordray specifically, the court's decision creates some uncertainty about the status of his position.

While that's sorted out, the obvious question is straightforward: why can't Cordray get an up-or-down vote?


As long-time readers may recall, no one, on either side of the aisle, have questioned Cordray's qualifications. On the contrary, he's done exceptional work on behalf of American consumers, and if the Senate were to vote on his nomination, it would be approved fairly easily.

So what's the problem? Senate Republicans, who lost the fight to kill the CFPB nearly three years ago, never really got over it, and still strongly disapprove of the agency's existence. With that in mind, when Cordraty's nomination originally came up, GOP senators said they would refuse to allow the agency to function -- or do any work at all -- unless Democrats agreed to weaken the CFPB's powers and lessen consumer protections.

Just so we're clear, this had never happened in American history. There was no precedent for the Senate blocking a qualified nominee solely because a minority of the chamber did not like the existence of the agency the nominee was selected to lead.

It was, to a very real extent, a nullification strategy -- Republicans in the Senate minority sought to block the enforcement of federal law through the confirmation process.

Traditionally, if the Republicans wanted to alter the powers of the CFPB, it would write legislation, send it to committee, bring it to the floor, send it to the other chamber, etc. But that takes time and effort, and might not work. So, instead, Republicans said they would block the existing federal law from taking effect unless Democrats accepted changes demanded by the financial industry lobbyists.

Democrats refused, and Obama gave Cordray the job anyway, with a recess appointment that's now facing legal jeopardy. The president re-nominated him yesterday in the hopes the new Senate will at least bring his nomination up for a vote.

Will Senate Republicans pursue the identical nullification strategy again? They have not yet said, but we should find out soon enough.