Richard Cordray, President Obama’s pick to lead the Consumer Financial Protection Bureau, won approval from the Senate Banking Committee last week on a party-line vote. His confirmation to run the new agency faces fierce opposition from Republicans, who have vowed to block Senate approval until reforms are made to the agency.
Sen. Richard Shelby (R-AL) is leading those calls for reform. As the ranking Republican on the Banking Committee, Shelby has maintained a hard line with Obama and Democrats on Cordray’s confirmation.
In an interview at Heritage, Shelby criticized Obama for failing to respond to the GOP’s suggested reforms for the CFPB. As a result, he encouraged Republican leaders to block Cordray and limit Obama’s ability to make a recess appointment.
“Forty-four of us have written a letter to the president and asked for three changes,” Shelby said. “We haven’t heard from the president. Maybe he’s off campaigning. … Until we hear from him, I don’t believe we’re going to confirm anyone.”
He also added: “I think it would be devastating if we let [Obama] make a recess appointment, but that’s the call of the leadership.”
The three reforms include creating a board rather than a single czar to run the agency, subjecting the CFPB to the congressional appropriations process, and making sure it considers impact of new rules on the safety and soundness of financial institutions.
Heritage has also outlined a number of problems with the CFPB. Research fellow Diane Katz writes that “eliminating the bureau outright would be the best option.”
In addition to fighting against the CFPB, Shelby has also proposed legislation to reform Dodd-Frank. He also addressed the recent decision by Bank of America to impose a $5 fee on debit-card transactions, a result of the Durbin Amendment to Dodd-Frank.