WASHINGTON, April 22 A U.S. Republican lawmaker
escalated a partisan fight over the new consumer protection
watchdog on Monday, saying the bureau's leader was not welcome
to appear before a congressional panel that oversees financial
Representative Jeb Hensarling of Texas, a Republican who
leads the House of Representatives Financial Services Committee,
said Consumer Financial Protection Bureau Director Richard
Cordray could not appear before the panel because he has not
been confirmed to his position by the U.S. Senate.
Lawmakers have battled over the bureau since it was created
in 2010. President Barack Obama appointed Cordray in January
2012 to lead the consumer watchdog on a temporary basis, but
Senate Republicans have refused to confirm him for a full term
until Democrats agree to change the bureau's structure.
The bureau's critics argue a recent court ruling proves that
Cordray's position is invalid, though Democrats and the consumer
watchdog dispute that conclusion because the case did not deal
directly with him.
Cordray is scheduled to appear before a Senate committee on
Tuesday to present a semi-annual report on the bureau's
activities, but Hensarling said he would not be asked to deliver
the report to the House panel.
"The Committee on Financial Services stands ready to accept
the testimony of the director of the CFPB on the semi-annual
report as soon as an individual validly holds this position,"
Hensarling said in letters to Cordray and to bureau general
counsel Meredith Fuchs.
The CFPB, formed after the 2007-2009 crisis to protect
Americans from financial scams, oversees mortgages, credit cards
and student loans.
Obama used a controversial maneuver known as a "recess
appointment" to install Cordray temporarily while most lawmakers
were out of Washington, after Senate Republicans refused to
confirm him to a full term. They say the bureau should be run by
a bipartisan board and not a single director.
Republicans said Cordray's appointment, as well as three
additional appointments to the National Labor Relations Board,
was invalid because lawmakers were not technically on recess at
A court earlier this year threw out the three labor board
appointees for that reason.
The ruling did not directly involve Cordray, and a separate
challenge to his appointment has not been decided in court, but
lawmakers and financial industry groups have said the same
reasoning could be applied to invalidate his appointment.
The Obama administration wants the U.S. Supreme Court to
weigh in on the appointments issue.
Consumer bureau spokesman Moira Vahey confirmed that the
CFPB had received Hensarling's letter. She said the court ruling
does not apply to the bureau and that it would continue to work
on behalf of consumers.
"Mr. Hensarling's own letter concedes that no court has
addressed the legitimacy of the president's appointment of
Richard Cordray to be the director of the CFPB," Representative
Maxine Waters of California, the top Democrat on the financial
services committee, said in a statement.
"I suggest that Chairman Hensarling allow Director Cordray
to appear before the committee to deliver his report as required
by law," she said.
Hensarling said that his committee would only hear testimony
from a confirmed director but that his panel would continue to
oversee the consumer bureau, and CFPB staff still could be asked
to appear before the committee.