Last week, 44 Republican Senators signed a letter to President Obama declaring that they will refuse to confirm anyone as a director of the new Consumer Financial Protection Bureau (CFPB) "absent structural changes that will make the Bureau accountable to the American people."
The changes they propose -- which match legislation being considered today by the full House Financial Services Committee-- would cripple the bureau and slow the reforms necessary to help avoid another financial crisis.
In other words, Senate Republicans have the CFPB, and if we ever want to see it alive, we have to meet their demands.
My good friend and colleague Barney Frank called this "the worst abuse of the confirmation process I've ever seen" and I couldn't agree more.
The CFPB was created to fill a huge gap in federal regulation: there is no entity in the federal government whose sole purpose and function is consumer financial protection -- consumers have been an afterthought. Which explains how predatory mortgage lending, abusive credit card practices, and anti-competitive policies came to be so widespread and so destructive in the run-up to the financial crisis.
Opponents of the CFPB have couched their proposals in some rather fine-sounding language about "improving" the bureau -- which opens its doors in July, and thus has yet to expose many flaws in practice.
If Republican proposals are translated into plain English, you can get the real picture of what they want....
1). The GOP Senators' letter says: Replace the single director with a five-member bipartisan board to oversee the Bureau.
Translation: Let's do everything we can to slow down reform by having the CFPB run by a committee, with each committee member to be confirmed by the Senate (where, as we've seen, any Senator can stall any action!) .
2). The GOP says: Subject the Bureau to the Congressional appropriations process (instead of funding through the Federal Reserve as is now law).
Translation: Let's politicize the process so that the mission of the bureau will always be subject to the influence of opponents and the special interests -- as Republican efforts this year to under-fund the SEC and the CFTC in the appropriations process demonstrate.
3). The GOP says: Establish "safety and soundness" as a criteria for review of CFPB rules.
Translation: Let's add another bottleneck, and use it as a way to stop block common-sense consumer protections. (And this is coming from those who complain about too much government bureaucracy!)
This bald-faced attempt by Republicans to derail the CFPB, mere weeks before it is to open its doors, is quite remarkable.
President Obama should respond by nominating who has always been the single best choice as director, Elizabeth Warren. It's the most reasonable response to Republican abdication of their "advise and consent" function.
Even as a recess appointment, which is limited to one year's tenure, I have no doubt Professor Warren will be able to accomplish more in that year than anyone else. After all, the CFPB was her idea.
And Senate Republicans? They will have brought about real consumer protections as a result of their trying to derail the CFPB.
The phrase Shakespeare might have used for this ironic twist on the end result of their letter? The GOP will have been hoist on their own petard.