FINALLY, A DIRECTOR FOR THE CFPB – MAYBE

In a speech in Ohio, on Wednesday afternoon President Obama announced that he would install Richard Cordrey as the head of the Consumer Financial Protection Bureau (CFPB) through a recess appointment. Last summer the president selected Cordray, a former Ohio attorney general, to direct the Consumer Financial Protection Bureau, but Senate Republicans have continued to block a vote on his nomination. GOP lawmakers have argued that the bureau should be accountable to Congress.

Republicans are questioning whether Obama’s plan to make a recess appointment is legal. Their argument rests on the GOP contention that Congress is not technically in recess. Republicans note that the U.S. Constitution stipulates that the House and Senate cannot adjourn for longer than three days without the consent of the other body – agreed to by a concurrent adjournment resolution. Neither chamber has passed an adjournment resolution. Instead both chambers have been holding pro-forma sessions every three days.

The white house counters that the lawyers who advised President Bush on recess appointments wrote that the Senate cannot use sham “pro forma” sessions to prevent the president from exercising a constitutional power,

House Speaker John Boehner responded that “these so-called gimmicks, which the House and Senate have held for decades, if not centuries, by both parties, are required to comply with the Constitution.”

So seventeen months after the Dodd-Frank Act became law, it appears we have a director of the CFPB. But will the appointment hold up? Have we heard the last from the Republicans on this?

With leadership in place, we now expect to see a mountain of regulations flowing out of the CFPB. We transition from watching political games in Washington to implementing thousands of pages of new and revised regulations.

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