Republicans in Congress really seem to hate reigning in the worst Wall Street abuses just about as much as they hate the Consumer Financial Protection Bureau. The CFPB is the agency that Senator Elizabeth Warren was slated to run until Republicans in the Senate refused to confirm her. Now, Congressman Jeb Hensarling, Chair of the House Financial Services Committee, is trying to argue that Cordray was never appointed legitimately.
Republicans are now blocking Cordray's appointment in the Senate, and a recent DC Circuit Court decision questioned the use of recess appointments in other circumstances.
Hensarling is helping lead the charge, according to TPM:
Rep. Jeb Hensarling (R-TX), the chairman of the House Financial Services Committee, which enjoys jurisdiction over regulatory bodies like the CFPB, says he lacks the legal authority to invite the recess-appointed director of the CFPB, Richard Cordray, to testify on behalf of the agency.
Cordray has of course testified before the Financial Services Committee several times. But Hensarling is now officially calling his legitimacy into question, and will not invite him to testify again until he's confirmed - something Senate Republicans say will not happen unless Democrats agree to statutorily weaken the agency.
While Hensarling is busy working for millionaire fat cats on Wall Street, California Congresswoman Maxine Waters told Hensarling what he can do with his tortured legal reasoning:
Not only is the decision by the U.S. Court of Appeals for the District of Columbia Circuit in the Noel Canning v. National Labor Relations Board (NLRB) case limited to the NLRB, but the case is actively being litigated. The notion that some legal scholars dispute the constitutionality of Director Cordray's appointment does not in fact make it "clear," as your letter claims, that the constitutionality of Director Cordray's appointment is currently invalid or will inevitably be overturned. To the contrary, the DC Circuit's decision contradicts 150 years of precedent. It also contradicts more than 280 recess appointments made by both Republicans and Democrats since 1987. Therefore it is inappropriate and unwarranted to prematurely and unilaterally conclude that the Noel Canning case warrants blocking director Cordray from fulfilling his statutory obligation to testify before Congress.
Rep. Waters' letter to Hensarling is below the jump.
If it's Friday, it must be the weekly wrap, when your Burnt Orange Reporters comment on all the news that fits in a blockquote.
South by Southwest is already underway, making downtown parking even more horrific than usual. Adding tremendous humor to the proceedings is parodic twitter account @SXSWPartyzzzzz with gems such as this:
OutKast, Max Weinberg and Hologram Hugo Chavez will be playing smooth jazz in the elevator at The W! RSVP tattooing "Viral!" on your nose!
The entire feed is worth a read, especially if you're already over SXSW party hysteria.
On an utterly non-satirical note, if you're free for happy hour tonight, you're welcome to join the Austin Young Democrats at Gourmand's tonight from 5:30 to 7:30 p.m. RSVP on The Facebook.
Last but not least, Burnt Orange Report was pleased to be named to The Fix's Best State Blogs list! All of the blogs on the list were nominated by readers, so thanks to everyone who took the time to endorse us.
Below the jump, find out what the BOR staff thinks about Nate Silver, T.S. Eliot, the Rainy Day Fund, Cruz & Cornyn, and the best thing to happen to the Senate Finance Committee in our lifetimes.
It's time for the Friday Wrap, where your Burnt Orange Reporters comment on all the news that fits in a blockquote.
It was a great week for consumers as Senator Elizabeth Warren attended her first Senate Banking Committee hearing. The gentlewoman from Massachusetts had a few questions for regulators that were long overdue. Upworthy has the video:
Senator Elizabeth Warren, y'all!
Below the jump, get caught up on Ted Cruz, Jerry Patterson, Annise Parker, Steve Munisteri, and religious fervor in Texas.
Two Conservative Groups - The Competitive Enterprise Institute and the 60 Plus Association- joined State National Bank of Big Spring, Texas on Thursday in a lawsuit challenging the constitutionality of two provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The lawsuit argues that the Consumer Financial Protection Bureau (CFPB), which regulates consumer financial products and services, and the Financial Stability Oversight Council (FSOC), which was established up to address systemic risks posed by large banks, are both unconstitutional.
The lawsuit also challenges the constitutionality of President Obama's recess appointment of Ohio Attorney General Richard Cordray to the head of the Bureau of Consumer Financial Protection. Senate Republicans had voted down Cordray's nomination after vowing publicly to hamstring the agency by derailing any nominee. Then, they held brief "pro forma" sessions of Congress to prevent recess appointments. President Obama eventually bypassed the Senate and installed Cordray anyway, arguing that because the short sessions do not constitute substantial work, they could be ignored for appointment purposes.
The CFPB aims to ensure American consumers get clear, accurate information as they shop for mortgages, credit cards, and other financial services so that they can avoid hidden fees and abusive and deceptive lending practices. The FSOC, which was created in response to the global financial crisis in 2008, is a collection of the nation's most influential regulators. The Council collects and analyzes information from financial institutions and other interconnected entities to identify systemic risks to U.S. financial stability. The lawsuit alleges that the CFPB and FSOC "comprise unprecedented violations" of the separation of powers and checks and balances contemplated in the Constitution.
From the filing:
"First, the CFPB's formation and operation violates the Constitution's separation of powers. Title X of the Dodd-Frank Act delegates effectively unbounded power to the CFPB, and couples that power with provisions insulating CFPB against meaningful checks by the Legislative, Executive, and Judicial Branches... below. Taken together, these provisions remove all effective limits on the CFPB Director's discretion, a violation of the separation of powers.
FSOC's formation and operation violates the Constitution's separation of Powers. FSOC has sweeping and unprecedented discretion to choose which nonbank financial companies are "systemically important" (or, "too big to fail"). That designation signals that the selected companies have the implicit backing of the federal government-and, accordingly, an unfair advantage over competitors in attracting scarce, fungible investment capital."
It seems to me that claiming the CFPB and the FSOC violate separation of powers and checks and balances ignores the fact that the agency was created by, and can be changed by, Congress. And the FSOC makes it tough for banks to get "too big to fail" in the first place by imposing rules for capital, leverage, and liquidity. It also has the authority to break up large companies by requiring them to divest holdings as a last resort. So, the notion that the FSOC will create a two-tiered financial system seems to ignore that the FSOC's main goal is to create a level playing field for all banks. Its overarching goal is to prevent the need for taxpayer-funded bailouts of big banks in the first place.
A CFPB Spokessman was dismissive of the suit:
"The lawsuit appears to dredge up old arguments that have already been discredited," said bureau spokesman Jennifer Howard. We're going to keep our focus on the important work Congress created us to do - making markets work for consumers and responsible providers."
I think the CFPB and the FSOC are probably both safe in the face of this lawsuit, which seems like an election-year stunt designed to gin up the birthers and Tea Party base of the modern Republican party. They seem to revel in banal blather about the evils of government doing anything to protect people cloaked in Constitutional jargon.
This is BOR's Video of the Day, or VOTD, our nightly video clip segment that hopefully provides you with a laugh or a chance to think at the end of the day.
Excuse me for a minute while I break into total Democratic fangirl mode -- I met Elizabeth Warren tonight!! She was in town for a fundraiser along with four other fabulous females who are seeking federal office in the Senate. They were all inspiring, and honestly, y'all should support them in any way you can.
Hearing from Congresswoman Tammy Baldwin (WI), Congresswoman Shelley Berkley (NV), former state Attorney General Heidi Heitkamp (ND), Congresswoman Mazie Hirono (HI), and instrumental advocate for the creation of the Consumer Financial Protection Bureau Elizabeth Warren (MA) was inspiring -- these are some really amazing human beings, and our entire government would be better off if all five of them are sworn in to the US Senate next January. They made it clear -- a woman's place is in the House... and the Senate. Also inspiring? EMILY's List President Stephanie Schriock and Planned Parenthood National Political Director Amy Taylor, both of whom spoke of the unprecedented attack on women's health, and the need to elect strong women to fight back against Republican attacks on our basic reproductive rights.
Anyways, while I am still kvelling from hearing all of these amazing women first hand, here's Elizabeth Warren in an out-take from the Obama campaign's documentary "The Road We've Traveled," talking about the challenges President Obama faced in his first term.
Help better things happen in his second term. Send these ladies to the Senate, y'all!
Check out all of our BOR videos of the day on the VOTD tag.