Still No Leader For Consumer Financial Protection Bureau. What Now?

The Consumer Financial Protection Bureau (CFPB) is still without a leader after a Senate vote today blocked former Ohio attorney general Richard Cordray. Obama nominated Cordray after Elizabeth Warren became a GOP target and was too controversial to win a vote. Cordray’s confirmation only got 53 votes and needed 60. The excerpt below is from IMMAAG, a mortgage industry advocacy group. Also below are two other links with background on the topic and where we go from here.

Today’s Senate vote has basically created a procedural block to the nomination of Richard Cordray move to the Senate floor where it would take only a 50% (simple majority) to approve the nomination. By invoking cloture, the Senate must garner 60 votes to allow the nomination to go to the floor for vote.

In what, except for Mr. Scott Brown (R-MA) who voted Yea, Ms. Olympia Snowe (R-ME) who did not vote Yea or Nay but “Present” and Mr. Kerry (D-MA) who did not vote; the issue was rejected on a party line result.

As we all know the Republicans are demanding structural changes to the Bureau and expect those to include a board instead of a director. Democrats are solidly behind the Director model and support Mr. Obama’s nominee.

Absent a “Ship’s Captain” much of the regulation of the portions of the Dodd-Frank Actthat directly impact non-depository mortgage companies will be delayed as the law does not afford a “headless” Bureau the authority to act on those organizations.

The implications of this delay in appointed leadership, regardless of form, can only cause continued confusion in the industry and result in inefficiency and consumer harm not to mention what it does to the 16,000 small businesses and 113,000 state licensed originators who must wonder what the future holds.

Further Reference:
Obama Not Giving Up on CFPB Director
Senate Vote Blocks CFPB Nominee Cordray
Richard Cordray Blocked As CFPB Head
IMMAAG website (pros should subscribe to emails. very timely.)

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