Financial Regulation

  • July 15, 2011

    by Jeremy Leaming

    Elizabeth Warren underwent her third hearing before the House Oversight Committee yesterday, fielding hostile questions and criticism for four hours about the Consumer Financial Protection Bureau, “which begins work in a week and still has no permanent leader in place,” The Washington Post reports.

    “It was a hard fight to get this agency passed into law," said Warren, who is overseeing the agency’s launch in her role as special advisor to the president. "I thought once [Dodd-Frank] passed, this kind of fighting would be over… Obviously, I did not fully understand the politics of the situation."

    The politics of the situation is that Republicans are using procedural tactics that are “purposely hidden, layered and complicated” to block Warren's nomination to head the agency because she was “too successful in building an efficient, consumer-oriented agency,” writes Catholic University clinical assistant law professor Victor Williams in The Huffington Post.

    But, he asserts, President Obama has clear constitutional authority to respond to these tactics by installing Warren as the agency’s director via recess appointment, even though House Republicans have pushed the Senate into holding pro forma sessions in order to prevent the three-day recess that they believe is required for such an appointment.

    “As I detailed in a prior post, in a 2010 National Law Journal op-ed, and most recently, in a July 4, 2011, Connecticut Law Tribune commentary, there is no three day minimum recess requirement needed to trigger the Executive's recess appointment authority,” Williams writes, citing several appellate court opinions. “…News reporters, analysts, and others continue to do great disservice by repeating the obstructionists' false assertion that the Senate's pro forma sessions trump the Executive's constitutional recess appointment authority.”

    David Arkush, director of Public Citizen’s Congress Watch, also argues that Republicans can’t block a recess appointment by Obama, though by different reasoning. He explains in a letter he sent to Obama in June that the Constitution permits the president to adjourn both houses of Congress if the Senate wants to adjourn but the House won’t permit it (and, he adds the minority of Republicans in the Senate can't force an adjournment).

    “The use of this ‘adjournment power’ would be particularly appropriate if the House prevents Senate adjournment in a bid to interfere with the appointment of certain public officials, a matter that the Constitution explicitly assigns to the President and the Senate,” the letter states.

    Watch video of Warren discussing her idea for the Consumer Financial Protection Agency at the 2009 ACS National Convention below.

  • April 19, 2011

    The Tea Party and other far-right activists are successfully shaping their image as a “constitutional movement” because they connect with “populist sentiment,” writes The New Republic’s Legal Affairs Editor Jeffrey Rosen.

    “Enthusiasm about constitutional amendments generally tracks closely with populist sentiment,” Rosen, a law professor at George Washington University law school, writes. “Simply put, populist movements tend to expend energy on constitutional amendments; those that are more elite-driven do not.”

    Rosen notes a slew of amendments that have been, and are being, pushed by the right-wing. Those include Tea Party-backed amendments to greatly restrict the power of the federal government and Religious Right-backed constitutional amendments aimed out curtailing reproductive rights and banning same-sex marriage.

    Rosen concludes that “the lesson here for liberals isn’t necessarily about passing constitutional amendments. It’s that, in order to have any success as a constitutional movement, they need to find a way to reconnect with populism.”

    One way to reconnect is to better promote objections to a government that is “heavily influenced by Wall Street.” Citing Harvard Law School professor Lawrence Lessig, progressives do share some common ground with elements of the Tea Party, a distrust of “corporate control.”

    At an ACS event earlier this year concerning corporate influence on the courts, former New York Gov. Eliot Spitzer urged progressives to become far more engaged in the debate over the Constitution, to fight back against Tea Party activists’ claims that they have the market cornered on constitutional scholarship.

    Spitzer said, “The Constitution is a wildly progressive document. It is an amazing thing. We all appreciate that. But our failure to stand up and defend it permits them to claim it.”

    He continued, “This is a document that reflects society. It pains me that we are losing the Constitution because we are unwilling to stand up and defend what it really is. We have to do that.”

    Some progressives have already taken to the challenge of fighting corporate influence on government. Jeffrey Clements, an ACS Issue Brief author on campaign finance regulation and corporate rights, has helped found a group dedicated to advancing a constitutional amendment that would reign in the ability of corporations to spend freely on elections.