WASHINGTON (AP) ? Republicans on Tuesday welcomed Richard Cordray to his first Senate hearing as director of the new Consumer Financial Protection Bureau with a polite warning: Your time on the job could be short.
“I can’t imagine how anybody could maintain, under the circumstances, that your appointment and your service is valid,” Sen. Mike Johanns, R-Neb., told Cordray. “And I can’t imagine … how the actions you’re taking will be upheld.”
It’s been barely a month since President Barack Obama bypassed senators and installed Cordray at the top of the agency, which was created under the 2010 financial overhaul.
Obama was frustrated by Republicans, who blocked Cordray’s appointment. So Obama used a recess appointment to put Cordray in the job.
Republicans say that move was unconstitutional because the Senate wasn’t really in recess at the time.
“I suspect that the Supreme Court will ultimately decide the constitutionality of the president’s action,” said Sen. Richard Shelby of Alabama, the committee’s senior Republican
Cordray, a former Ohio attorney general, and the Republican senators kept the hearing civil.
Cordray said he intends to pursue his responsibilities under the law. He said the agency will closely supervise mortgage firms, credit card companies, payday lenders, student loan providers and other financial firms. The agency will strive to reduce the burden of regulation on smaller banks and credit unions without sacrificing consumer protection.
Republicans have opposed the financial overhaul, as well as the agency. They say it imposes unnecessary regulation on U.S. businesses and that will hurt economic growth.
On Tuesday, Shelby questioned Cordray’s unchecked powers because the agency does not have a board overseeing the director.
Cordray “will have unfettered power over the operation of the bureau,” Shelby said. “If he so chooses, he does not have to answer to anyone. This is not a choice any bureaucrat should have.”
The White House justified the appointment in January by saying that Republicans held up Cordray’s nomination in order to paralyze the agency.