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Republicans pounce on CFPB

By Marcie Geffner · Bankrate.com
Saturday, February 9, 2013
Posted: 5 pm ET

Congressional Republicans are renewing their attack against the Consumer Financial Protection Bureau, or CFPB, and its director Richard Cordray, and Democrats are stepping up to defend the agency and its chief.

In a Feb. 1 letter to President Barack Obama, 43 Senate Republicans said they will continue to oppose the confirmation of any nominee to be the director of the agency until changes are made.

Specifically, they want the CFPB director to be replaced by an oversight board; they want the agency to be subject to the congressional appropriations process, and they want more checks and balances to help ensure that excessive regulations don't result in needless bank failures.

"It is essential that we address these reforms prior to confirming any nominee," the letter stated.

Meanwhile, Sens. Mike Johanns, R-Neb.; Lamar Alexander, R-Tenn.; and John Cornyn, R-Texas, have introduced legislation that would curtail the CFPB's authority.

The Restoring the Constitutional Balance of Power Act of 2013 would prohibit the CFPB from enforcing or implementing its decisions or financial regulations without a constitutionally confirmed board or director and block the next transfer of funds from the Federal Reserve to the CFPB to carry out any actions that would require the approval of a director.

In a statement, Johanns said the CFPB had been "operating under a ruse for more than a year" because Cordray's appointment wasn't confirmed by the Senate.

"Any decisions or regulations made by the people who have no right to be there are invalid. This legislation forces them to stop functioning as if they legitimately hold office and recognize the reality that the president overstepped his constitutional authority," he said.

Sen. Jeff Merkley, D-Ore., has responded, calling the Republican effort to undermine the CFPB an "attack on America's families."

"The senators blocking Cordray must ask themselves a fundamental question: Does financial fairness for working families matter? I think it does," Merkley said in a statement. "Financial fairness is essential for successful families. Financial fairness is a family value."

The CFPB was created in July 2010 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Do you think Cordray should stay? Are Republicans right about how the CFPB should function?

Follow me on Twitter: @marciegeff

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