Richard Cordray Confirmed as CFPB Director

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July 17, 2013 · by mlivolsi · Spark Notes

Prepared by: Wes Huffman (

After yet again coming to the brink of the so-called “nuclear option” of drastically changing the chamber’s parliamentary rules, Senators came together at the last minute to reach an agreement on pending nominations for Obama Administration appointments, including Consumer Financial Protection Bureau (CFPB) Director Richard Cordray.

The cloture vote on Cordray, which allows debate to proceed, was a test of the pending agreement.  The cloture vote cleared that morning by a margin of 71-29 and Cordray was confirmed late on Tuesday by a vote of 66-34.  Senator Elizabeth Warren (D-MA), long considered the mind behind the CFPB, was the presiding officer during last night’s final confirmation vote, and Cordray was sworn in as Director by Vice President Joe Biden earlier today.

Cordray’s confirmation removes many questions surrounding the leadership of the Bureau.  Perhaps most importantly, the confirmation of Cordray removes legal questions surrounding the Bureau’s regulatory efforts.  The court challenges to decisions made by the Bureau because of President Obama’s use of recess appointments (including Cordray’s) remain active, but the newly confirmed Director can validate and/or reissue all of the Bureau’s regulations and guidance.

Enforcement actions are slightly different as the companies in question could point to an improperly appointed Director at the time of the action as a possible defense in these cases.  However, Cordray’s confirmation may limit the effectiveness of this defense, and enforcement actions going forward cannot be challenged on these grounds.

Though many Republicans and industry advocates will continue to push for structural changes to the CFPB, such as replacing the single Director with a Commission-style leadership structure, the confirmation leaves the prospects for such changes much less likely.  However, in the final negotiations, Republican Senators did receive some assurances on increased oversight for the Bureau.

For example, Sen. Rob Portman (R-OH) said he had received a commitment from Cordray to appear before the Appropriations Committees.  The Bureau receives its funding as a set percentage of the operating budget of the Board of Governors of the Federal Reserve and is generally exempted from the appropriations process.  In response to Portman’s request for a commitment, Cordray indicated he has testified before and met with the banking committees on the operations of the Bureau and is also willing to do the same with the appropriations committees.

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