President Obama has defied Congress by installing former Ohio Attorney General Richard Cordray as the country’s first head of the Consumer Financial Protection Bureau, established to protect citizens against the practices of Wall Street banks and lenders. Obama’s move defied Republicans, who have refused to allow Cordray’s confirmation after failing to stop the bureau’s creation in 2010. "The reason this has been held up had nothing to do with the qualifications of Richard Cordray...and everything to do with Republicans’ insistence on trying to destroy the agency. And that insistence traces directly to the contributions and political influence of Wall Street," says Robert Weissman, president of Public Citizen, which supports Obama’s appointment. [includes rush transcript]
This is a rush transcript. Copy may not be in its final form.
JUAN GONZALEZ: President Obama defied Congress Wednesday by installing former Ohio Attorney General Richard Cordray as the country’s first head of the Consumer Financial Protection Bureau. The bureau was created by the 2010 Dodd-Frank financial oversight law in an effort to protect consumers against Wall Street banks and lenders. Obama made the announcement of the recess appointment at a rally outside of Cleveland, Ohio.
PRESIDENT BARACK OBAMA: Today I’m appointing Richard as America’s consumer watchdog. And that means he is going to be in charge of one thing: looking out for the best interests of American consumers, looking out for you. His job will be to protect families like yours from the abuses of the financial industry. His job will be to make sure that you’ve got all the information you need to make important financial decisions. Right away he’ll start working to make sure millions of Americans are treated fairly by mortgage brokers and payday lenders and debt collectors.
AMY GOODMAN: Republicans are threatening to sue the White House over the recess appointment of the former Ohio attorney general, Richard Cordray, contending the Senate is still technically in session.
Ever since the Consumer Financial Protection Bureau was formed, Republican lawmakers have attempted to water down its power and to block the White House from naming a permanent director. Last month, Republicans blocked a vote on whether to confirm Cordray. Previously, Republicans opposed calls to name Elizabeth Warren as the head of the consumer watchdog bureau which she had long advocated for.
On Wednesday, Obama defended his decision to use a recess appointment to install Cordray into the position.
PRESIDENT BARACK OBAMA: The only reason Republicans in the Senate have blocked Richard is because they don’t agree with the law that set up a consumer watchdog in the first place. They want to weaken the law. They want to water it down. And by the way, a lot of folks in the financial industry have poured millions of dollars to try to water it down. That makes no sense. Does anybody think that the reason that we got in such a financial mess, the worst financial crisis since the Great Depression, the worst economic crisis in a generation, that the reason was because of too much oversight of the financial industry?
Now, every day that Richard waited to be confirmed—and we were pretty patient. I mean, we kept on saying to Mitch McConnell and the other folks, "Let’s go ahead and confirm him. Why isn’t he being called up? Let’s go." Every day that we waited was another day when millions of Americans were left unprotected, because without a director in place, the consumer watchdog agency that we’ve set up doesn’t have all the tools it needs to protect consumers against dishonest mortgage brokers or payday lenders and debt collectors who are taking advantage of consumers. And that’s inexcusable. It’s wrong. And I refuse to take no for an answer.
JUAN GONZALEZ: To talk more about Richard Cordray and the Consumer Financial Protection Bureau, we’re joined by longtime consumer advocate Robert Weissman. He’s president of Public Citizen.
Welcome to Democracy Now!
ROBERT WEISSMAN: Good Morning, Juan. Hi, Amy.
AMY GOODMAN: Good to have you with us.
JUAN GONZALEZ: Well, Robert, the President’s comments yesterday, do you feel that he’s now striking a tone on this issue of finally dealing with the Consumer Protection Bureau?
ROBERT WEISSMAN: Yeah, on this issue, at this time, he did exactly the right thing. I’m not sure we can project out that that’s going to continue. This was a very good appointment. It was good that he refused to continue to be abused and stomped on by the Senate Republicans. He nominated a strong leader for this very important agency. And he framed it exactly right: this is about protecting American consumers. It’s the only agency, among all the many financial regulatory agencies, that has its mission to protect consumers rather than to look out for the well-being of banks and other financial institutions. And he was also right to say the reason this has been held up had nothing to do with the qualifications of Richard Cordray, the new leader of the agency, and everything to do with Republicans’ insistence on trying to destroy the agency. And that insistence traces directly to the contributions and political influence of Wall Street.
JUAN GONZALEZ: Now, the Republican leadership has claimed that the President is trying to illegally get around Congress, because obviously the Senate has been trying to maintain a sort of a pro forma being in session, even though there are no senators there. But the number of recess appointments by President Obama compared to previous presidents has really been extraordinarily low. This was his 29th, compared to 139 that Bill Clinton made, 243 that Ronald Reagan made. Your sense of the arguments of the Republican leadership?
ROBERT WEISSMAN: Yeah, I mean, I think in terms of the recess appointments, this is emblematic of how the administration has approached Congress, which is to be incredibly deferential. You know, the Republicans control the House; they don’t control the Congress. They control the House. And the administration has been going out of its way, over and over, to try to find compromises, starting from already a compromised position, to see if they can take an even more weak position on whatever issue they’re working on. That’s been reflected in the nomination process, where they’ve not been able to get nominations through, and they have not tried to push for recess appointments. So you see the numbers like what you’re saying. The administration has had only a few dozen recess appointments, many fewer than not just the Clinton administration, but also the Bush administration. And now, finally they’re saying, "Look, on this one, we’re going to draw the line." And it’s about time.
AMY GOODMAN: So, Rob Weissman, talk about the significance of the announcement yesterday. In fact, was it in your old high school in Ohio?
ROBERT WEISSMAN: That’s right. It was in Shaker Heights. That’s where I went to high school. So I was very happy about that.
AMY GOODMAN: And, of course, Robert, Cordray was the former attorney general of Ohio. But the fact that this recess appointment was not made in Washington, but in Ohio?
ROBERT WEISSMAN: Well, if—the President was clearly motivated by politics on this, and I think that’s a great thing. If it’s going to take politics to make this administration be a little bit more populist, to be a little bit more ready to stand up for the American people as against corporate interests, to finally be somewhat critical of Wall Street, then I’m all for political influence over the policymaking process.
AMY GOODMAN: I want to play for you a comment by Republican Senator Lamar Alexander of Tennessee last month. He was asked if he planned to vote for Richard Cordray.
SEN. LAMAR ALEXANDER: I do not, and I’m not going to vote for him or for anybody else. Nothing wrong with him. He is, I understand, is a good person. But this so-called consumer finance protection position is one more Washington, D.C. czar. This is a person who’s accountable to nobody, not to the president, not to Congress, and he or she would have the power, if confirmed, to write rules and regulations that would affect millions of everyday transactions in Maryville and Knoxville and Oak Ridge. And we don’t have a system of government like that. They need to be accountable. And I’m not going to vote to create any new Washington czar until we change the law so that that person is accountable to elected representatives.
AMY GOODMAN: That was Lamar Alexander. Juan?
JUAN GONZALEZ: Well, Robert Weissman, I wanted to ask you a little bit about Cordray’s record, when he was an attorney general in Ohio, and why it was that President Obama chose him.
ROBERT WEISSMAN: Well, Cordray had a short term as attorney general in Ohio, and he did a lot of really good things. He went hard after financial institutions that were ripping off the state’s pension system, and he really started taking a lead on the state attorneys general investigations of the mortgage fraud that is really a pretty central part of the collapse of the housing market. So, only had a short time in the office, he did a lot of really good things.
I think, as, you know, Lamar Alexander was saying, there’s no disagreement among Senate Republicans that this is a guy who’s qualified for the job. He’s very smart, as everyone says. He’s very knowledgeable. He’s actually a very genial guy, as Alexander said. And there’s just no question about his qualifications. The objections had to do only with the existence of the agency and the ability of the agency to actually protect consumers.
The Republicans and the Wall Street interests have trotted out this line that the agency was somehow uniquely powerful, with these amazingly, you know, super-agency authorities that no other agency has. It’s not true. It’s an agency like other agencies. This is an agency head that would be confirmed, like other agency heads. It would issue rules, like other agencies do. It would enforce the rules, like other agencies do. The one thing that would be different about the—and that will be different about the Consumer Financial Protection Bureau than the other alphabet soup agencies in the financial sector is that its mission is to protect consumers. It’s not to make sure the banks are doing well, not to make sure the banks are engaged in sufficiently cautious practices that they’re not going to bankrupt themselves and the country. It’s to make sure that consumers are protected. And that’s the simple fact of what the big banks and Wall Street is objecting to.
AMY GOODMAN: Robert Weissman, it’s interesting in terms of the politics of all of this. Elizabeth Warren, who didn’t get to be the head of it, is now running for Senate. She’s running against Scott Brown, who has now endorsed Cordray, is that right? Voted—was supportive of Cordray as head of this bureau, because he has this challenge of Warren in Massachusetts.
ROBERT WEISSMAN: Yeah, that’s exactly right. I mean, there’s a lot of irony in this story. And it’s to the administration’s discredit that they did not appoint Elizabeth Warren to run the agency as soon as the agency was established. But they did now, to their credit, appoint someone who’s going to be pretty good, and they did it in an aggressive way. And it is, you know, as you’re pointing out, quite ironic that she’s now running for Senate in Massachusetts against a Republican who, feeling the heat, is the only one who suggested that he would be willing to go along and get Cordray appointed to the job.
AMY GOODMAN: And this was Senator Ted Kennedy’s former seat, the late senator. Rob Weissman, please stay with us. We’re going to continue on the issue of campaign finance reform. I think these are directly linked. Robert Weissman is president of Public citizen. This is Democracy Now!, democracynow.org, The War and Peace Report. Back in a minute.
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