Richard Cordray

  • February 19, 2016

    by Nanya Springer

    As part of its Access to Justice series, ACS on Thursday hosted Director of the Consumer Financial Protection Bureau Richard Cordray for a discussion of how forced arbitration and other anti-consumer measures are harming average Americans. Cordray, the agency’s first director, has overseen the birth and growth of the CFPB, which sprung directly from the financial crisis of 2007-2008. During the ensuing years, the cumulative wealth of middle-income Americans fell drastically, and many families saw their net worth cut in half.  The CFPB, he noted, was forged to ensure “consumer financial markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives.”

    A burgeoning threat to consumers is mandatory arbitration agreements. Cordray explained that originally, arbitration was used primarily “in commercial disputes between businesses that bargained with each other to create tailored contracts; it was rarely used in disagreements between businesses and consumers.” Over the last two decades, however, “banks started including arbitration clauses in their consumer contracts, requiring any disputes or disagreements to be resolved through private arbitration.” He noted that the attorneys who advised these banks specifically pointed out that arbitration clauses can be used to block class action lawsuits.

    To investigate the impact of increasingly common arbitration clauses, the CFPB undertook the most extensive study of consumer finance arbitration ever conducted, finding that tens of millions of consumers are subject to at least one mandatory arbitration clause—and most don’t even know it. Most importantly, the CFPB found that “arbitration clauses restrict consumers’ relief in disputes with financial service providers because companies are using them to block class proceedings in any forum – whether court or arbitration.”

  • July 16, 2013

    by Jeremy Leaming

    As AEI’s Norman Ornstein predicted last week at a Common Cause event on the escalating use of the filibuster to scuttle consideration of legislation and nominations, senators crafted a deal to avoid a slight change to rules governing the filibuster.

    TPM’s Sahil Kapur reports that the deal means that nominees to the National Labor Relations Board (NLRB), Consumer Financial Protection Bureau (CFPB), the Environmental Protection Agency, the Labor Department and the Export-Import Bank would get up-or-down votes in the Senate. Also Sharon Block and Richard Griffin, appointed to the NLRB via recess appointments and then re-nominated by President Obama would have to be replaced with new nominees, but with a written promise that the new nominees would be confirmed before the end of August. Following the deal the Senate voted to begin debate on the nomination of Richard Cordray to head the CFPB. Cordray’s (pictured) was recess-appointed to the position by President Obama because of Republican opposition to the agency created by financial overhaul legislation.

    Yesterday during an event at the Center for American Progress, Senate Majority Leader Harry Reid (D-Nev.) said that the only way for Senate Republicans to avoid a vote to slightly change the rules surrounding the filibuster would be to stop blocking consideration of the president’s executive branch nominees. Regarding today’s deal he said, “I think we see a way forward that will be good for everybody,” The New York Times reports.

    Common Cause, which last year lodged a lawsuit challenging the constitutionality of the filibuster, said the deal should be the start of further action on the filibuster.

    “A vote on these nominees should be just the starting point for rules changes that would break the Senate’s gridlock permanently,” said Common Cause Staff Counsel Stephen Spaulding. “Senate rules should guarantee a prompt review in committee and confirmation by a simple majority vote for ALL future presidential nominees.”

    In a recent guest post for ACSblog, former ethics attorney for President George W. Bush also urged action on the filibuster, saying the “situation is even worse under President Obama now that Senate Republicans who once said they despised the filibuster have shown they actually enjoy it.”

    Regarding judicial nominations, which were not on the table in the discussions that lead to today’s deal, there are more than 80 federal court vacancies, 32 of them considered judicial emergencies. The high vacancy rate has plagued the majority of Obama’s time in office. As noted here Republicans led by Senate Judiciary Committee Ranking Member Chuck Grassley (R-Iowa) are threatening to scuttle or greatly stall President Obama’s nominations to fill the three vacant seats on the powerful U.S. Court of Appeals for the District of Columbia Circuit. The D.C. Circuit hears myriad constitutional concerns, including many challenges to government regulations intended to enforce environmental laws. For more about vacancies on the federal bench, see JudicialNominations.org.

  • February 4, 2013

    by Jeremy Leaming

    Shortly after Sen. Majority Leader Harry Reid (D-Nev.) announced so-called filibuster reform, TPM reported that the chamber’s chief ringleader of obstruction, Sen. Minority Leader Mitch McConnell (R-K.Y.) “bragged” about killing the serious reforms that would have undermined obstructionists’ ability to so effectively wield the tool.

    In this post not long before the “filibuster reform,” was announced I noted that it appeared Reid was prepared to suffer even more obstructionism. (TPM had reported that Reid was ready to forgo a simple-majority vote to make real changes to the filibuster that would require senators to actually mount and sustain a filibuster, instead of relying on an easy and stealthy manner of deploying the filibuster.)

    Then late last week, as reported by TPM’s Brian Beutler, McConnell and 40 of his Republican colleagues promised try again to block the confirmation of Richard Cordray to permanently head the Consumer Financial Protection Bureau “unless Democrats agree to pass legislation dramatically weakening the agency.”

    President Obama overcame the first Republican blockade of his choice to the head the CFPB via a recess appointment that will leave him on the job until the end of the year. A recent, though widely attacked, opinion by the U.S. Court of Appeals for the District of Columbia Circuit, found that Obama’s recess appointment of Cordray and three nominees to fill vacant seats on the five-member National Labor Relations Board were unconstitutional. The Obama administration has signaled it will appeal the opinion, with White House Press Secretary Jay Carney calling it “novel and unprecedented.”

     

  • January 25, 2013

    by Jeremy Leaming

    Senate Republicans devoted to protecting big business interests and undermining workers’ rights vigorously fought President Obama’s efforts during his first term to keep the National Labor Relations Board functioning and appoint a leader for the Consumer Financial Protection Bureau.

    Republicans in the Senate have long sought to ensure that Obama could not alter the makeup of the NLRB, in order to keep it pro-business or inoperative. Moreover, Senate Republicans were opposed to the creation of the CFPB, intended to crack down on some of the shady business practices that helped lead to the Great Recession; and after its creation they were bent on making it as ineffective as possible.

    Earlier today, the Republican agenda of hobbling the NLRB, which exists to enforce the National Labor Relations Act, was advanced by a ruling from a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit. According to the court, Obama’s appointments to the NLRB in early January 2012 during a 20-day recess of Congress were unconstitutional.

    The appeals court opinion is at odds with other rulings from appeals court circuits and the fact that for a century, presidents, citing Article II of the Constitution, have used recess appointments to fill executive branch vacancies.

    As The New York Times notes, the appeals court decision “also raises doubts about the legitimacy of Mr. Obama’s recess appointment” of Richard Cordray to the CFPB. Obama appointed Cordray the same time he selected the three members of the labor board. At the time Obama noted that he was forced to make the recess appointments because of the Senate’s refusal to move on his nominations to the board and the bureau. “The American people deserve to have qualified public servants fighting for them every day – whether it is to enforce new consumer protections or uphold the rights of working Americans. We can’t wait to act to strengthen the economy and restore security for our middle class and those trying to get in it, and that’s why I am proud to appoint these fine individuals to get to work for the American people.”  

    The opinion by the appeals court panel – all three judges are Republican appointees – is radical and sweeping. Adam Serwer, in a piece for Mother Jones, notes that if the appeals court decision were to be upheld – the Obama administration is likely to appeal it – it would invalidate NLRB decisions made since last January and also impact actions taken by the CFPB.

    The CFPB, Serwer writes “has done what liberals hoped and Republicans feared: Prevented companies from gouging consumers with the kind of unscrupulous business practices that caused a nationwide economic meltdown four years ago. Although Cordray’s appointment is being challenged separately, Friday’s ruling gives companies impacted by CFPG’s decisions an opening to argue that some of the CFPB’s actions should be invalidated.”

    But constitutional law experts argued at the time Obama made the recess appointments that he was on solid legal ground. In a Jan. 2012 piece for The Times, Harvard constitutional law professor Laurence Tribe said the president’s recess appointments “ought to be a slam dunk” and that the Constitution is clear on “reserving the authority the president needs to carry out his basic duties ….” 

  • March 30, 2012

    by John Schachter

    Who would have thought a 220-year-old law would be relevant in the health care reform debate that dominated the Supreme Court this week? Yet there it is – the Militia Act of 1792 – standing firmly as an answer to an oft-asked question in this debate. Is there an example of anything that Congress has mandated that people buy?

    Let’s put aside for the moment that the requirement that we pay our taxes “mandates” that we all “buy” Social Security and Medicare, highways, medical and scientific research, tanks and weapons, and anything else the government pays for through its revenues. How about the narrower question of Congress specifically mandating that citizens actually purchase a good or service?

    When ACS President Caroline Fredrickson appeared on Fox News’ “The O’Reilly Factor” on March 27, the show’s eponymous host appeared genuinely miffed when Caroline mentioned the Militia Act. “What act was that?” he asked. O’Reilly had insisted on hearing an example of Congress requiring citizens to purchase something – or as he so politely put it, “[Name] one thing that the federal government compels you to buy, one thing. One thing.”

    And when given the oldest and most relevant answer, he balked. It’s pretty clear he didn’t expect there to be an answer. While it’s often difficult to divine what our Founders may have intended with various constitutional prerogatives, in this case we have actual hard evidence.

    The following day (presumably after firing the intern who failed to brief him properly), O’Reilly had to justify his erroneous skepticism. Easy for him – he changed the question.