The Consumer Financial Protection Bureau (CFPB) opened its doors in July of 2011 and after a prolonged partisan political battle, it finally has a director. After Republican Senators made it clear they would continue to block Richard Cordray's nomination, or anyone else's, until their demands to restructure the CFPB to make it less powerful were met, President Obama, in a speech on Wednesday in Cleveland with former Ohio Attorney General Richard Cordray, publicly confirmed Cordray's appointment during Congress' recess.
Although it is very likely that Cordray's recess confirmation will be challenged, it is clear that President Obama had both the legal authority and moral obligation to make this appointment. Recess appointments are not new, but some legislators are claiming that Cordray's appointment exceeded the President's executive powers since Congress was technically in a pro-forma session. Both houses of Congress can hold pro forma sessions at which no formal business is expected to be conducted. Such sessions are usually held to fulfill the Constitution's requirement "that neither chamber can adjourn for more than three days without the consent of the other." Over time, pro forma sessions have also been used to prevent presidents from making recess appointments . Yet, such recess appointments have occurred in the past. In 1903, when the first session of the 58th Congress ended, President Theodore Roosevelt made over 160 recess appointments during a recess that lasted only a fraction of a day. Similarly, President Truman twice made recess appointments during recesses that lasted just a handful of days. Additionally, the 11th Circuit Court of Appeals, the highest court to consider the question of when recess appointments can be made, considered whether a George W. Bush appointee to the 11th Circuit was invalid because it occurred during a very short legislative break and held that the Constitution, on its face, does not establish a minimum time that an authorized break in the Senate must last to give legal force to the President's appointment power under the Recess Appointments Clause.
Cordray is also not the first controversial figure to be appointed through a recess appointment. Some familiar names -- Thurgood Marshall, Earl Warren and William Brennan -- were all, at one time or another, recess appointments. In 1961, President John F. Kennedy appointed Thurgood Marshall to the 2nd Circuit Court of Appeals -- he was finally confirmed by the Senate the following year by a vote of 54-16. President Dwight Eisenhower appointed three judges to the Supreme Court during recesses; including, Warren, Brennan and Potter Stewart. Nor has President Obama overused his powers, having made a total of 28 recess appointments, compared to:
Challenging Cordray's appointment means that, once again, Congress is not listening to its constituents nor looking out for their financial well-being. According to a recent AARP and Center for Responsible Lending poll, 74 percent of all respondents (including 73 percent Independents and 68 percent Republicans) responded affirmatively that they support having a single agency with the mission of protecting consumers from financial companies.
Unfortunately, even before Cordray's nomination, some legislators weren't listening. Forty-four Republican senators sent the President a letter stating that they refused to vote for anyoneto become the director unless they got what they want --- restructuring of the CFPB to make it less powerful. Specifically, they demanded that instead of a single director there should be a board overseeing the CFPB, that the CFPB should be subject to the Congressional appropriations process, and that prudential financial regulators, who oversee the safety and soundness of financial institutions, be given the right to veto any regulations issued by the CFPB. These are the same restrictions that conservatives had originally wanted in the Dodd-Frank Wall Street Reform and Consumer Protection Act but were unable to get passed. By making its funding contingent on appropriations and putting veto powers on its regulations, the CFPB would essentially have little operating funding and little authority.
After forty-four senators blocked Cordray's nomination in September and again in December, and not because of his qualifications (in fact, several Senators indicated that Cordray's qualifications were good) the White House decided to exercise its legal powers and not let Americans' financial futures hang in the balance. As President Obama stated in his Cleveland speech, "every day that [Cordray] waited to be confirmed was another day when millions of Americans [were] left unprotected."
Although the CFPB has been working hard since it launched in July, without a director, the CFPB could not "exercise its full power" since it could not enforce laws against "non-bank financial institutions such as pay day lenders" and other members of the predatory fringe financial markets. Now that Cordray has been confirmed, through a perfectly legal recess appointment, the CFPB can fully protect American's financial futures.