Why Richard Cordray matters

Richard Cordray got some good news this morning. He should enjoy now, because it will probably be the last positive development he sees for quite a while.

The Senate Banking Committee voted along party lines Thursday to approve Richard Cordray as the new director of the Consumer Financial Protection Bureau — a move that will have little effect since Republicans have vowed to scuttle the nomination.

Cordray’s nomination was approved 12-10 and now moves to the full Senate. But Alabama Sen. Richard Shelby and other GOP senators intend to block the former Ohio attorney general from final approval unless the bureau is structurally reformed.

The committee vote was 12 to 10, with every Democrat supporting Cordray’s nomination and every Republican opposing it. GOP members freely admit that Cordray is qualified and is more than capable of excelling in the position, but they rejected him anyway as part of a larger opposition to consumer protections.

More important than the votes against Cordray today are the Republican plans to prevent his nomination from ever reaching the floor.

Rep. Barney Frank (D-Mass.) recently explained, “Cordray’s record as attorney general of Ohio puts him in a small group of people able to act effectively to deal with the mortgage crisis. No one has raised any questions about his intelligence, integrity or dedication. Yet his nomination will not even be fairly considered by the full Senate. Forty-four Republicans have announced that in disregard of their constitutional duty to consider nominations on the merits. They will not confirm anyone until the Senate majority reverses itself to once again put bank regulators in a position to overrule virtually all of the policies that would be set by the consumer agency.”

Quite right. Congress passed legislation creating the Consumer Financial Protection Bureau and the president signed it into law. Republicans are now saying they’ll allow the agency to function, but not until Democrats agree to weaken the law in ways the financial industry likes.

It’s all part of the normalization of extortion politics. Traditionally, if the GOP 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. Instead, we see the latest in a series of GOP extortion strategies: Republicans will force Democrats to accept changes to the agency, or Republicans won’t allow the agency to meet its legal mandate.

Our system of government has never worked this way; it wasn’t designed to work this way; and it can’t work this way. As Jonathan Cohn recently explained, “The consumer protection agency exists because a majority of democratically elected lawmakers passed a law and a democratically elected president signed it. Now a minority of Senators representing a minority of the country are exploiting procedural rules (i.e., using the filibuster) to prevent that law from taking effect. That’s undemocratic. And I mean that with a small ‘d.'”

Treasury Secretary Timothy Geithner told Senate Banking Committee, “If the Senate fails to confirm [Cordray], what will happen is it’ll leave a vast array of non-bank financial institutions … outside the scope of consumer protection, which was exactly the same mistake that left us so vulnerable to the financial crisis we went through.”

For Republicans, who’ve decided to take dictation from industry lobbyists, apparently that’s the idea.