In July of 2010 President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act. The bill passed the House 237-192 in June, 2010...and the Senate passed the bill 60-39 in July, 2010.
Dodd-Frank was passed in response to the financial sector collapse that began in 2007.
The bill's goal....
To promote the financial stability of the United States by improving accountability and transparency in the financial system, to end "too big to fail", to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.
Dodd-Frank includes a provision which sets up a consumer financial protection agency.
Title X establishes the Bureau of Consumer Financial Protection, within the Federal Reserve. The new Bureau regulates consumer financial products and services in compliance with federal law. The Bureau is headed by a director who is appointed by the President, with the advice and consent of the Senate, for a term of five years. The Bureau is subject to financial audit by the GAO, and must report to the Senate Banking Committee and the House Financial Services Committee bi-annually. The Financial Stability Oversight Council may issue a "stay" to the Bureau with an appealable 2/3 vote. Even though the Bureau is placed within the Fed, it operates independently. The Fed is prohibited from interfering with matters before the Director, directing any employee of the Bureau, modifying the functions and responsibilities of the Bureau or impeding an order of the Bureau.
One year after Dodd-Frank's passage, progressives encouraged Obama to nominate Elizabeth Warren to head the new consumer protection bureau. Here's why...
For the first year after the bill's signing, Warren worked on implementation of the bureau as a Special Assistant to the President in anticipation of the agency's formal opening. While liberal groups and consumer advocacy groups pushed for Obama to nominate Warren as the agency's permanent director, Warren was strongly opposed by financial institutions which had criticized Warren as overly aggressive in pursuing regulations and by the Republican members of Congress.
Instead of picking Warren, in July 2011 (one full year after the law's passage) President Obama nominated former Ohio AG Richard Cordray as the bureau's director. Since then, Republicans in the Senate have filibustered any "advise and consent" vote on the president's nomination.
That's where it all stood until yesterday, when in one of his boldest political moves, President Obama appointed Cordray during an official Senate recess. From Obama's speech in Shaker Heights, Ohio yesterday....
"For almost half a year, Republicans in the Senate have blocked Richard’s confirmation. They refused to even give Richard and up or down vote. Now, this is not because Richard is not qualified. There's no question that Richard is the right person for the job. He’s got the support of Democrats and Republicans around the country....
So what’s the problem, you might ask. The only reason Republicans in the Senate have blocked Richard is because they don’t agree with the law that set up a consumer watchdog in the first place. They want to weaken the law. They want to water it down. And by the way, a lot of folks in the financial industry have poured millions of dollars to try to water it down.
That makes no sense. Does anybody think that the reason that we got in such a financial mess, the worst financial crisis since the Great Depression, the worst economic crisis in a generation -- that the reason was because of too much oversight of the financial industry?"
The reason Senate Republicans have been blocking Cordray's nomination is because Republicans don't agree with the Dodd-Frank legislation in the first place. Obstructing the nomination process for Cordray (or anyone Obama appointed) meant that the Consumer Protection Agency part of the law could never go into effect. And of course, that's the point.
The Usual Suspect Republicans, Mitch McConnell and John Boehner are oh-so-flabbergasted and offended by Obama's recess appointment of Cordray. Boehner called Obama's move "an extraordinary and entirely unprecendented power grab."
...there is precedent for appointments made during recesses of fewer than three days — President Theodore Roosevelt made more than 160 recess appointments during a Senate break of less than a day in 1903.
Mitch McConnell said yesterday that Obama..."arrogantly circumvented the American people" by appointing Cordray during a Senate recess period. This only makes sense if the "American people" equals "congressional Republicans."
Summary: Before the Civil War, southern state nullification efforts were all in vogue. If Washington passed any laws through the constitutional process, Confederate state representatives believed they had the right to disobey those laws....nullify them. That led to the Civil War where 600,000 Americans died. After the War, nullification was regarded as an illegal act.
In the 1950s, southern states attempted to use nullification and interposition to prevent integration of their schools. These attempts failed when the Supreme Court explicitly rejected nullification in Cooper v. Aaron, again holding that the states may not nullify federal law.
With Republicans seeking to nullify the ACA (ObamaCare) and with Republicans trying their best to nullify Dodd-Frank through obstruction of it's implementation....it's becoming clearer and clearer that the Republican Party is morphing ever closer into a potentially very dangerous Neo-Confederacy.
Good on Obama for punching back. His appointment of Cordray yesterday, plus 3 National Labor Relations Board members Republicans were also obstructing, demonstrates that Obama will not back down from the threats of a Neo-Confederacy.
About This Blog