THE BLOG
07/09/2013 02:22 pm ET Updated Sep 08, 2013

Senate Showdown Coming on Consumer Protection

Earlier today, July 9, representatives from seven consumer and community organizations delivered 165,000 petition signatures to Sen. Dianne Feinstein (D-Calif.). Their message: The Senate should stop delaying and confirm Richard Cordray as director of the Consumer Financial Protection Bureau right away.

That may involve a fight over Senate rules, and it's not an exaggeration to say that the welfare of every consumer in this country is at stake.

Until the creation of the CFPB by the Dodd-Frank financial reform law, there was no office in the federal government whose sole job was to protect consumers from abusive or unfair practices by banks, credit card companies, payday lenders or other financial businesses. The bureau has been so productive and helpful to consumers that the usually low-key folks at Consumer Reports called its first year of work "amazing."

The CFPB has already moved to curb abusive mortgages, returned half a billion dollars to consumers who were gouged by credit card companies, and investigated tens of thousands of consumer complaints. It's taken those complaints and turned them into a searchable database that the public can use to see what types of complaints have been filed against which businesses, and how they were resolved. The CFPB has also made it easier to understand the terms of your mortgage when you buy a home.

Just last month, the bureau obtained a $6.5 million refund for servicemembers who had been victimized by lenders who failed to disclose the fees and costs of auto loans. And while it's been a powerful ally for consumers, the CFPB has been praised by the financial services industry for being reasonable and easy to work with.

As the CFPB enters its third year, it will continue its oversight of "nonbanks" (such as payday and private education lenders) and has indicated it may soon target abusive debt collection. These are exactly the kind of protections that consumers need.

But 43 senators have sworn to block confirmation of Richard Cordray as CFPB director, even though they've stated no objections to his qualifications, record or skills. These senators insist that the bureau must be drastically weakened and its independence crippled before they'll agree to confirm any director.

Cordray has been able to serve as director temporarily due to a gimmick called a "recess appointment," but that's under challenge in court.

In a world that made sense, those 43 senators wouldn't be able to block an important appointment. 57-43, after all, is a pretty healthy majority.

But the Senate's filibuster rule allows 40 senators to block nearly anything. And the Republican Senate minority is using that rule to block not only Cordray, but the president's nominees to head the Environmental Protection Agency, National Labor Relations Board and other key agencies.

Unfortunately, it's come down to a Republican/Democrat divide, but consumer protection should not be a partisan issue. No party or political ideology that I'm aware of endorses consumers being ripped off. The victims of predatory lending are just as likely to be Republicans, Democrats, independents, Greens or Libertarians.

There's growing pressure on Senate Majority Leader Harry Reid (D-Nev.) to force a change in the Senate rules, killing or weakening the filibuster. A showdown could come soon -- possibly this week -- over what some call "the nuclear option."

The Senate is a tradition-steeped institution, and many members are reluctant to change a longstanding practice. I get that. And I see the value of the filibuster as bulwark against a rash rush to judgment, a tool to prevent abuses by the majority. It wasn't meant to be used the way it's being used now, as a blanket ideological roadblock against any person or policy that 40 senators dislike.

In my work, I've seen the devastation that predatory lending caused, and how unethical lenders targeted vulnerable communities, including low-income Americans, communities of color, and people whose English was limited. This has to stop, and Congress actually passed solid reforms aimed at stopping it.

That a minority of senators might be able to effectively nullify a law that was duly passed by Congress and signed by the president is undemocratic and troubling. But what may be most troubling is that a large number of senators would vote to deny their own constituents protections against being cheated, tricked and gouged -- protections those constituents want and need.

The Senate should confirm Richard Cordray right away, and I hope Sen. Feinstein -- who represents me as a Californian -- will lead the effort.

Because I do see the good the filibuster might do, I hope this can be accomplished without a huge fight over Senate rules. But if the "nuclear" button is pushed, the senators who blocked worthy nominees like Richard Cordray will have no one but themselves to blame.

Wherever you live, you can sign a petition in support of Cordray here.