Consumer Financial Protection Bureau

  • February 1, 2012

    by Nicole Flatow

    In recess appointing Richard Cordray to the Consumer Financial Protection Bureau and three others to the National Labor Relations Board, President Obama has acted “sensibly and soundly to defend his own prerogatives,” UNC Chapel Hill constitutional law professor Michael Gerhardt said during a House Oversight and Government Reform Committee hearing Wednesday.

    During a more than three-hour hearing that featured sharp questioning and a host of objections to President Obama’s actions by Sen. Mike Lee, Gerhardt explained the clear constitutionality of President Obama’s action, and praised the Office of Legal Counsel’s recent memorandum defending the legality of the action as a “perfectly good example” of the kind of nonpartisan legal analysis performed by the office.

    After dismissing arguments that President Obama did not act during an actual “recess” because the Senate held pro forma sessions every three days, Gerhardt went further to explain that Obama has an affirmative constitutional duty to enforce the laws faithfully, which he was aiming to effectuate in making recess appointments.

    “No doubt in this case the president considered that if he didn’t act there would be laws left unenforced --  laws that he’s obviously trying to do what he can to put into implementation,” Gerhardt said.

    Some of the other witnesses testified that the recess appointments have resulted in uncertainty for businesses, because decisions made by the NLRB and actions taken by the CFPB may be invalidated if legal challenges to Obama’s appointments are successful.

    But Gerhardt agreed with Rep. Danny Davis during questioning that all actions and major pieces of legislation are subject to legal challenge, and there is nothing unique about Obama’s recess appointments.

    “It’s sort of a false premise to say that recess appointments are likely to create litigation when the litigation is likely to take place in any event,” Davis said. “Whether these are recess appointees or any other kind of appointees, individuals still have the option to ask for judicial review.”

    Around the same time that this hearing was occurring, the Senate Banking Committee was also reviving the issue of Obama’s recess appointments during an oversight hearing involving Richard Cordray.

    As The National Law Journal’s Jenna Greene explains:

  • January 16, 2012
    Guest Post

    By Cedric Ricks, Communications Associate, National Fair Housing Alliance


    Nearly 46 years ago, Dr. Martin Luther King Jr. led a 1966 summer march in Chicago's Marquette Park demanding fair housing. King protested a dual housing market, in which whites were free to reside wherever they could afford, but African-Americans were barred from many parts of Chicago and in other American cities because of restrictive covenants, social practice and discrimination in lending

    Before he left Chicago, King referred to the historic protest as "a first-step in a 1,000-mile journey." Since then real progress has been made with the passage of the federal Fair Housing Act of 1968 - passed one week after King's assassination - and the enactment of the Equal Credit Opportunity Act of 1974.

    But to achieve a broad affirmative vision of fair housing many additional steps are still needed. It's entirely fitting we consider what comes next as our nation honors Dr. King's birthday with a federal holiday.

    Congress took an important step forward toward equality and justice with the creation of the Consumer Financial Protection Bureau, and President Obama advanced even further this month by appointing former Ohio Attorney General Richard Cordray to lead the Bureau.  

    The CFPB has one central mission: to make the market for consumer financial products and services work for ALL consumers, responsible providers and the economy as a whole. To accomplish its mission, the Bureau seeks to promote transparency and consumer choice while preventing unfair, deceptive and discriminatory practices.

  • January 13, 2012

    by Nicole Flatow

    The Justice Department’s Office of Legal Counsel released a memo yesterday explaining the legal justification for President Obama’s recess appointments of Richard Cordray to head the Consumer Financial Protection Bureau and three others to the National Labor Relations Board.

    "This is one opinion that is likely to be followed by future presidents,” UNC law professor Michael Gerhardt told Mother Jones. “It's not easy to overturn opinions of the [Office of Legal Counsel], as the history of the [Bush-era] Torture Memos demonstrate."

    The memo concludes that Obama was authorized to act under the Constitution’s Recess Appointments Clause, and that the Senate’s attempt to block appointments by holding “pro forma” sessions every few days did nothing to disrupt its recess.

    "[W]hile Congress can prevent the President from making any recess appointments by remaining continuously in session and available to receive and act on nominations, it cannot do so by conducting pro forma sessions during a recess," Assistant Attorney General Virginia Seitz writes in the memo.

    Ohio State University’s Peter Shane calls the memo’s argument that Obama made the appointments during what was effectively a 20-day recess the more “institutionally modest” approach. He and others have argued that even during a three-day recess, Obama could have made such appointments.

    Bolstering these arguments is the fact that Obama only made appointments to those agencies that were unable to perform essential functions so long as the vacancies remained open.

  • January 6, 2012

    by Nicole Flatow

    The case that Barack Obama’s recess appointment of Richard Cordray (pictured) and three others was constitutional “ought to be a slam dunk,” writes Harvard constitutional law professor Laurence Tribe in The New York Times.

    The Chamber of Commerce has already threatened to launch a court challenge to the move, but Obama’s decision to fill the top spot at the Consumer Financial Protection Bureau and three vacancies on the National Labor Relations Board has “strong support both from the text and the original purpose of the recess appointment clause,” Tribe explains.

    For one thing, holding “sham sessions” every three days during which no business is conducted does nothing to change the nature of the Senate recess, Tribe writes.

    As a Washington Post editorial that also takes aim at the pro forma sessions describes it:

  • January 5, 2012
    BookTalk
    The Odd Clauses
    Understanding the Constitution Through Ten of Its Most Curious Provisions
    By: 
    Jay Wexler

    By Jay Wexler, a law professor at Boston University School of Law.


    When I first sat down to write The Odd Clauses — my new book about ten of the Constitution’s lesser known but still-pretty-important provisions — probably the hardest question I faced was which clauses to include. This, in turn, forced me to confront the question of what makes an odd clause odd? Are the oddest clauses those that nobody has ever heard of? Those that are historically anachronistic? Those that seem to deal with topics — post roads, perhaps? — that seem somehow beneath the dignity of a constitution?

    In the end, after many late-night boozy breathless conversations about the meaning of constitutional oddness (not really), I decided that, for me, what makes a clause odd is its specificity. The clauses that I find oddly compelling are those — like the Incompatibility Clause, which prohibits members of Congress from simultaneously holding executive office, or the Letters of Marque Clause, which gives Congress the power to authorize private ships to fight pirates on the government’s behalf  —that perform or illustrate key constitutional functions or values (separation of powers, for instance, or allocating power over foreign affairs) in very specific, and therefore (to me, anyway), quirky and odd ways.

    Under this definition, the Recess Appointments Clause of Article II, Section 2 (“The President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.”) qualifies as odd, and I therefore included it as the subject of Chapter Three of my book (illustrating presidential powers). But at the same time, I realized that in many other ways the clause is not all that odd — people have generally heard about it, and it’s played an important role historically — and so it was no surprise that of all the clauses I discuss in the book, the Recess Appointments Clause is the first to make front page news. (By contrast, the notion that Senator Scott Brown might be violating the Incompatibility Clause by remaining in the National Guard has made front page news only in my own head.)

    For the past month or so, speculation ran rampant as to whether President Obama would use his recess appointment power to appoint Richard Cordray as the first head of the newly created Consumer Financial Protection Bureau. Republicans refused to confirm Cordray unless major changes to the law creating the new agency that are unappealing to the President were implemented, and so a recess appointment had been the President’s only option. To stop the President from taking this step, Republican senators decided to hold pro-forma sessions every three days since leaving for the holidays (Democrats, incidentally, did a similar thing at the end of the Bush Administration), relying on past governmental pronouncements that in order to qualify as a “recess,” the Senate must be on break for at least three days. 

    Originally, some speculated that President Obama might appoint Cordray during the imaginary moment on January 3 when the previous session of Congress ended and the new one began, following the example of Teddy Roosevelt, who pulled such a maneuver (to much criticism) back in 1903. Instead, Obama waited until January 4, when he exercised his more typical recess appointment power to install Cordray as the head of the new agency without Senate approval, on the theory that the Republicans’ pro-forma sessions do not render what otherwise would be a recess a recess, for purposes of the Constitution.

    Republicans are, of course, up in arms, threatening to challenge the President’s exercise of power in court. It is likely that a court — maybe even the Supreme Court — will one day weigh in on whether the President exceeded his power under the Recess Appointments Clause. Do pro-forma meetings count as real Senate sessions?