In his first Senate hearing since taking over the Consumer Financial Protection Bureau, new Director Richard Cordray faced “dialed-down” opposition Tuesday from Republicans still angry over President Obama’s decision to put him in place through a recess appointment.
GOP members had considered boycotting Mr. Cordray’s testimony before the Senate Banking Committee in an effort led by Sen. Roger F. Wicker, Mississippi Republican, but about half of the Republican members attended the oversight hearing.
Sen. Charles E. Schumer, New York Democrat, poked fun at the GOP’s failed boycott of the new CFPB chief.
“I can’t help but note the fact that we had a healthy attendance in the committee this morning,” he said. “That strikes me as a good thing.”
Mr. Schumer said that “my colleagues have dialed down some of their opposition,” adding: “Plans of a mass protest appear not to have gone over with many members.”
The Senate hearing comes a week after Mr. Cordray’s first public session in the House, where Republicans seemed open to working with him, despite their objections to the CFPB. Republican critics say the agency, created under the president’s 2010 financial regulatory overhaul law, has too much power, while its work and budget are not subject to sufficient congressional oversight.
Republicans haven’t given up the fight altogether. The GOP has turned to the courts in hopes that Mr. Cordray’s appointment and the rules he has created in the meantime will be overturned.
Sen. Mike Johanns, Nebraska Republican, warned Mr. Cordray that a legal cloud still hangs over his actions at the new agency.
“I can’t imagine how anybody could maintain, under the circumstances, that your appointment and your service are valid,” he said. “And I can’t imagine … how the actions you’re taking will be upheld.”
Mr. Obama announced the recess appointment Jan. 4 after Senate Republicans blocked a floor vote on Mr. Cordray’s nomination, setting off a constitutional wrangle as lawmakers contended that Congress was technically not in recess at the time.
Sen. Richard C. Shelby, Alabama Republican and the panel’s ranking Republican, said the CFPB will have “unfettered power” and is “free of even the most basic checks and balances.”
“Since the bureau was first proposed, I have expressed my grave concerns about its lack of accountability,” Mr. Shelby said.
He said Democrats have “resisted every Republican effort to make the bureau more accountable to the American people by changing its structure.”
Mr. Cordray pushed back against arguments questioning his legitimacy.
“It’s not clear cut, in any means, that this is not a valid appointment,” he testified. “I believe it is.”
He told lawmakers he is focused on helping consumers by simplifying financial forms for mortgages, credit cards and student loans. He is also trying to level the playing field for honest businesses.
“I now have legal obligations I’m supposed to carry out for this bureau,” he said. “I’m going to do that.
Mr. Cordray’s supporters said it was time to move on and focus on how the CFPB can help consumers.
“I just simply can’t believe we’re still having this debate,” Sen. Sherrod Brown, Ohio Democrat, said. “The job - Richard Cordray’s job - is so important.”
“We can’t operate this government when one party says we’re not going to approve this appointee, because we don’t like the agency he runs,” Mr. Brown added.
• Tim Devaney can be reached at tdevaney@washingtontimes.com.
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