Legal Director, Alabama Appleseed
For the first time in our democracy, the Senate is blocking a Presidential reappointment because a minority disagrees with the agency’s mere existence. This temper tantrum shall not abide.
Richard Cordray must be confirmed as director of the Consumer Financial Protection Bureau (“CFPB”) without further delay or gamesmanship. The CFPB’s urgent mission far outweighs the procedural criticisms cited by Senators Shelby, Sessions, and others as grounds for blocking a vote on this obviously well-qualified nomination.
As the fight to reform Alabama’s payday lending bill gained momentum this legislative session, we witnessed the pressure placed on the bill’s sponsors and other legislators by the lenders’ lobbyists to make major concessions and we witnessed the readiness of many legislators to defend unscrupulous lending practices. Given the situation, Alabamians need a strong, independent federal regulator to protect financial consumers across the nation.
Predatory lending, principally in the home mortgage industry, was a major cause of the 2008 financial crisis and its ongoing damage to the U.S. economy, aided by the detrimental impact of payday lending has cost Alabamians and our state’s economy millions year end and year out. An effective CFPB is the first line of defense for consumers.
Created in the wake of the 2008 financial crisis, the CFPB’s role is to establish basic rules of fairness and transparency for mortgages, credit cards, student loans, auto loans, debt collection and other banking and lending products. Without a confirmed director, the CFPB could lose a critical piece of its authority over payday lenders, check cashers, and other nonbank lenders. That’s a risk Alabama borrowers cannot assume.
Senators must choose to stand up against Wall Street lobbyists and predatory lenders who, after failing to prevent the CFPB’s creation, now seek to block the director’s reconfirmation in an attempt to derail the CFPB’s progress and undermine its value as a consumer watchdog in D.C.
Senators face a simple choice: allow an up/down vote on this nomination, or open the door to more of the problems the CFPB is trying to prevent – abusive and deceptive banking and lending practices like those that, in all too recent memory, helped bring about an epidemic of foreclosures, saddled millions of Americans with unmanageable debt, and triggered a financial and economic calamity from which the nation is still struggling to recover.
Director Cordray has drawn wide praise. Business and financial leaders as well as consumer, community, civil rights, labor, and faith groups have commended the bureau for its openness, thoughtfulness, and balanced approach under his leadership. Nevertheless, 43 Senators – including Sens. Shelby & Sessions – are threatening to keep his nomination from coming to a vote unless the agency’s funding and authority are undermined.
While reasonable people can have different views about the best way for any particular agency to be organized, no one could plausibly claim that the CFPB’s governance rises to the level of a national crisis, justifying a game of political brinksmanship that is already creating uncertainty that will further delay the economic recovery, undermine consumer protection and leave families at risk. That prospect may help explain why opposition to Cordray is no longer coming from banks, but rather, in large part, from lobbyists and extreme political partisans whose own business model thrives without meaningful and effective regulation.
Alabamians need the CFPB, and the CFPB needs stable leadership, without further delay.
Alabama Appleseed recently delivered to the offices of Senators Shelby and Sessions petitions which call on the Senate to confirm Richard Cordray to a full term as director of the CFPB bearing the signatures of 809 citizens of Alabama.
No one disputes Richard Cordray’s fitness, character or experience. It’s time for an up or down vote on his confirmation; leave the Dodd-Frank revision or repeal attempts at the door.
Alabama Appleseed is a non-partisan public interest legal advocacy organization working for systemic policy reforms that achieve justice and fairness for vulnerable populations that usually have little, or no, voice in developing or changing policies that impact their lives. Shay can be reached at [email protected]