U.S. Senator Jerry Moran (R-Kan.), member of the Senate Banking Committee and Ranking Member of the Senate Committee on Appropriations Financial Services and General Government Subcommittee, released the following statement on President Obama's nomination of Richard Cordray to be the Director of the Consumer Financial Protection Bureau (CFPB):
"My colleagues and I remain frustrated by the lack of progress in addressing our concerns about the structure of the CFPB," Sen. Moran said. "In May 2011, I joined 43 of my Senate colleagues in delivering a strong message to the White House: no nominee to head the CFPB will be confirmed by the U.S. Senate -- regardless of party affiliation --without basic changes to the bureau's structure. Today's decision by the D.C. Circuit Court raises real questions about constitutionality of Richard Corday's appointment and compounds the already serious concerns with accountability at the Bureau. It is unfortunate we find ourselves in this position, but I remain hopeful that the Administration will choose to put the Constitution and the best interests of consumers first. I will continue oppose any nominee until the commonsense structure the President originally proposed for the bureaucracy is restored."
The May 2011 letter to the President called for three specific, commonsense reforms to the Bureau's structure:
Replace the single Director with a board to oversee the Bureau. This would prevent a single person from dominating the Bureau and provide a critical check on the Bureau's authority.
Subject the Bureau to the Congressional appropriations process. This would provide oversight and accountability to the American people on how public money is spent.
Establish a safety-and-soundness check for the prudential financial regulators, who oversee the safety and soundness of financial institutions. This would help ensure that excessive regulations do not needlessly cause bank failures.
In the 112th Congress, Sen. Moran also introduced legislation to reform the structure of the CFPB. The Responsible Consumer Financial Protection Regulations Act of 2011, S. 737, would replace the single CFPB Director with a Senate-confirmed multi-person commission -- similar to the leadership structure of the Securities and Exchange Commission (SEC), Commodity Futures Trade Commission (CFTC) and Federal Trade Commission (FTC). It would also subject the CFPB to the regular appropriations process like most federal agencies.
The Dodd-Frank Act currently allows the CFPB director to set his or her annual budget by withdrawing funds directly from the Federal Reserve, rather than going through the annual Congressional appropriations process like most independent agencies. Additionally, Dodd-Frank denies the Federal Reserve any authority to deny or adjust the CFPB director's request. Sen. Moran's legislation would subject the CFPB to the annual appropriations process, authorizing funding levels for FY 2011 and 2012 equal to the president's estimate of need.
The full text of the letter is provided below. A scanned copy is attached.