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Did Obama Offer a Faulty Rationale for Cordray Move?

by Keith Koffler on January 5, 2012, 12:17 pm

President Obama’s recess appointment Wednesday of Richard Cordray to lead the Consumer Financial Protection Bureau may not allow the agency to perform all of its functions, undermining one of Obama’s key rationales for the controversial move.

Under the law, the agency cannot regulate non-banks until a director is confirmed by the Senate.

Some Republicans, including widely respected Sen. Rob Portman of Ohio, are arguing that the law creating the agency very specifically requires that he be confirmed by the Senate – and not appointed without a Senate vote during a recess – before he can begin to regulate non-banks.

If Cordray’s appointment was not necessary to get the agency fully up and running, it supports the argument that a primary motive for the appointment was political. Cordray is said to be eying higher office in Ohio – Obama’s announcement of the appointment in Ohio sounded a lot like a Cordray campaign rally – and Obama has already begun raising money off the appointment.

The need for confirmation is made explicit in Section 1066 of the Dodd-Frank bill, which created the agency.

SEC. 1066. INTERIM AUTHORITY OF THE SECRETARY.

(a) IN GENERAL.—The Secretary is authorized to perform the functions of the Bureau under this subtitle until the Director of the Bureau is confirmed by the Senate in accordance with section 1011.

According to the Volokh Conspiracy, a conservative legal blog: “section 1011 is a defined term which provides: ‘The Director shall be appointed by the President, by and with the advice and consent of the Senate.’”

But Obama during his Ohio appearance Wednesday asserted that he needed Cordray in place in order for the agency to go after non-bank entities that he thinks are ripping off customers.

Without a director in place, the consumer watchdog agency that we’ve set up doesn’t have all the tools it needs to protect consumers against dishonest mortgage brokers or payday lenders and debt collectors who are taking advantage of consumers.

The appointment has stirred a furious reaction from Republicans, who say the Senate is not in recess and Obama’s “recess appointment” is illegal.

H/T to two of my readers, Moe and srdem65, for letting me know about this.

Leave a Comment

{ 28 comments… read them below or add one }

cheryl January 5, 2012 at 12:40 pm

Oh please, and what exactly is anybody going to do about this…nothing…absolutely nothing.

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MarjoJimbo January 5, 2012 at 2:40 pm

I agree, cheryl. NO ONE will do anything about this. Is it even being reported on the MSM?

Members of Congress are up to their eye balls in stuff, too. You know: people in glass houses can’t throw stones.

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langley barfly January 5, 2012 at 3:05 pm

“Main Stream Media” = Liberal Sycophants

“Congress” = Moral Cesspool

*yawn* nothing new to ‘report’ here…

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AFVET January 5, 2012 at 5:40 pm

Wrong Attitude cheryl.
This Country was not built on a defeatist philosophy.

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cheryl January 5, 2012 at 12:43 pm

The rationale doesn’t matter. It’s just a smoke screen. Soon he won’t even offer reasons why he does anything…how dare you question him.

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ol gator January 5, 2012 at 1:00 pm

these spineless congress critters are hung in their dung,,,
maybe a couple squeeks but no action… how pitiful to allow an ignorant
ego maniac to operate like this.. shame on ALL of them!.. and us.

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Steve January 5, 2012 at 2:00 pm

I believe what we’re witnessing is a coup by the entire Washington establishment.

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cheryl January 5, 2012 at 3:17 pm

Pelosi gives him praise for being bold.

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langley barfly January 5, 2012 at 2:10 pm

US House + US Senate = CESSPOOL.

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Star January 5, 2012 at 2:48 pm

How about a “board”–if he wants to think of himself as some sort of CEO instead of a constitutionally governed president, then the Senate is his Board and must approve.

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langley barfly January 5, 2012 at 3:19 pm

I used to have some respect for the “US Senate”.
Being a student of History I always thought the US Senate had some ‘respect & dignity’… (compared to the 435 idiots, retards & criminals that make up the “US House)
But over these past few years following ‘current events’ more closely (thanks to sites like WhiteHouseDossier.com) I have lost repect for the US Senate and those 100 out-of-touch, self-centered, millionare$, political, blow-hards…

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Star January 5, 2012 at 12:57 pm

The average American knows more about dishonest investment advisers, payday lenders, truck lenders, collectors, etc–the maggotry–than these Ivory Tower boys will ever learn! I guess that guy was a prosecutor–but still….

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Anonna January 5, 2012 at 1:08 pm

I am not sure why the federal government is going after these lenders. Sure, they are shady characters, but so are the people who commit voter fraud, who manipulate school food programs to enlarge union memberships, who cross our national borders without permission and steal jobs, etc.

So, this is solely Obama’s Obot-friendly rationale for bypassing the Senate illegally to make an appointment — am I wrong?

It will sound good at dinner tables, “Obama just wants to stop people like that payday lender who telephoned your co-worker six times a day and made her lose her job,” not, “Obama just wants to be sole dictator of what does and doesn’t happen in American government. He doesn’t like that separation of powers and the reailities of checks and balances embarrass him by reminding him that his policies in the first two years of his government were so unpopular that Democrats lost control of a House of Congress and now Obama can’t convince the controlling party to agree with his suggestions.”

The one gives an Obot a good emotional thrill and the other is the voice of rational thought. So, of course, Obama supplies his true believers with the emotional candy that they need.

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Lizzy January 5, 2012 at 1:08 pm

Yes we do perhaps we should be in office instead of the bunch of
folks there to collect a check they don’t do anything else as far as I can see.

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Star January 6, 2012 at 1:37 pm

…and cushy pensions…

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GotFreedom January 5, 2012 at 1:00 pm

Not a “legal eagle” but what about this?

Article 2, Section 2 of the Constitution says that the president “shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments. 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.”

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Anonna January 5, 2012 at 1:29 pm

I am no legal eagle either, but this is what I understand about what has just happened.

The Senate did not consider itself in recess. There was a pro forma session held each day, which is just what its name implies — a short activity maintaining in-session status. Can the President on his/her own decide when the Senate is or is not in session? Does the power of the Executive Branch extend to this sort of interference in the functioning of other branches? I have read that this would mean even weekends could be considered recesses. Perhaps Obama doesn’t like the pro forma session idea, but is it his place to declare them invalid and bully ahead on his own?

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Sadie January 6, 2012 at 1:32 pm

@Got Freedom/Anonna

Another no legal eagle here. Bottom line: The Senate doesn’t give a damn – period. They can complain and bluster all day and unless and until they legally/constiutionally do something about it, we’re all sucked into the abyss.

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DeniseVB January 5, 2012 at 1:02 pm

Professor Jacobson over at Legal Insurrection has some good points ….

http://legalinsurrection.com/2012/01/obama-desperately-seeks-a-crisis-to-take-advantage-of/

Republicans in Congress have no choice but to retaliate against this power grab, and that is just what Obama wants. He wants a crisis he can take advantage of, perhaps over the FICA holiday which runs out in February (how smart were the Tea Party congressman for opposing a short term extension?).

Obama was elected by crisis, he seeks to create crisis at every turn, and he never lets a good crisis go to waste.

I say give him the crisis, but do it carefully so that this time we are the ones who get to take advantage. We have a President who is arrogant, dismissive, and out of control, the nation knows it. It has to stop, and it sets the issue up nicely for November 2012.

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girly1 January 5, 2012 at 1:05 pm

“Hope and Change”

“Pass This Bill”

“We Can’t Wait”

Famous last words from the greatest con artist on the planet!

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William January 5, 2012 at 1:16 pm

Portman should be worried. It was reported earlier that when told of this development the president exclaimed, “Will no one rid me of this turbulent senator?!”

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srdem65 January 5, 2012 at 1:44 pm

We seem to be heading into a contitutional crisis seeded by MrO’s desire to govern without the consent of Congress.
This administration’s attitude toward our common laws and constitutional restraints are unprecedented in modern times.

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langley barfly January 5, 2012 at 2:07 pm

…Its a “Constitutional Crisis” only if it is ‘reported’…

Yet no one in the “media”, or the ignorant masses who voted for Obama know what a “Constitutional Crisis” is… or care (re: read a real US History book)

BUT, since the “Media” will NOT TRULY ‘REPORT’ about “Pres.” Obama… there is ‘no’ Constitutional Crisis as this once proud Nation; the United States of America goes to Hell..(1776-2012?) under “Pres.” Barack Hussein Obama…

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Mr. T. January 6, 2012 at 12:34 am

So true. This is too “inside baseball” for the average person…folks who are too busy working (or trying to find work), raising their kids, or just not paying close attention to stuff like this.

Barry and the MSM have portrayed this as him looking out for the little guy, while the Republicans are the bad guys who don’t care about the average person. And it’s working. He’s getting away with it.

This is going to be a long year.

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Wigglesworth January 5, 2012 at 2:14 pm

The statement that powers are granted to a Secretary upon Presidential appointment with Senate consent is standard in many agencies. It doesn’t invalidate the power of a recess appointee.

The real issue is whether or not Obama can make a “recess appointment” when the Senate does not consider itself in recess.

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cheryl January 5, 2012 at 3:35 pm

Pelosi openly admitted they weren’t in recess so I’m sure behind the scenes they’ve got that little item covered. I also learned either congress can’t go into recess without the approval of the other..We are all learning quite a bit about how our government runs…at least how it used to run. Rules don’t matter so- recess schmecess.

move along, nothing to see here…

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DeniseVB January 5, 2012 at 4:53 pm

God Bless Facebook, just saw this ….

Remember in January 2009, Obama said:

“I do solemnly swear that I will faithfully execute the office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States.”

Vacations: check.
Perks: check
Tax Americans: check
Increase debt of every American: check
Preserve, protect defend Constitution: nope

No further discussion needed

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drjohn January 6, 2012 at 8:29 am

Who’s going to do anything about it? Holder?

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