President Barack Obama is set to name Richard Cordray to lead the new federal consumer financial protection bureau through a recess appointment, a tactic that a Charlotte-based banking lawyer sets up another partisan battle.
Wednesday, January 4, 2012
"I think it was a calculated political move on the part of the president of the United States to score points with his base and create a problem with Republicans who would challenge it," said Don Lampe, an attorney with Dykema's office in Charlotte.
The Consumer Financial Protection Bureau, created as part of the Dodd-Frank financial reform law as a watchdog for financial products like mortgages and credit cards, had gone without a permanent director in the face of opposition from Republicans.
Lampe said he expects in the coming hours for Republicans to make public statements questioning the president's constitutional authority to make such an appointment and calling it overreaching.
Liberal group ThinkProgress has already published a blog post explaining why it believes Obama had the authority to make the pick.
The naming of a director will affect non-banks -- like mortgage lenders and payday lenders -- more than deposit-taking institutions, Lampe said, due to the structure of the law. Banks are generally already subject to oversight from the bureau.
UPDATE: In a tweet, U.S. Rep. David Price, D-N.C., praisedObama's move, saying "Americans deserve a strong CFPB even if Senate GOP objects."
UPDATE: From the American Bankers Association -- "The controversial nature of today's recess appointment reinforces the banking industry's concerns about the Bureau's structure and lack of accountability. It puts the Bureau's future actions in constitutional jeopardy, threatening its work, complicating compliance efforts of banks and further undermining the entity's authority and credibility." Read more.
Posted by Andrew Dunn at 10:37 AM