The Pittsburgh Post-Gazette generously ran an essay I wrote today. They cut it a bit, so I'm inserting most of the original version below:
President Obama has nominated former Ohio Attorney General Richard Cordray to head the Consumer Financial Protection Bureau, but 44 Republican Senators have declared that they will oppose any nominee because the Bureau's director will have "far too much power." The Senators complain that the Director will have a five-year term, will not be subject to the congressional appropriation process, and will have extensive authority over financial institutions, among other businesses.
You might think that the Bureau is the only federal agency whose head has a five-year term. But no: to pick just one agency, the Office of the Comptroller of the Currency's chief, the Comptroller of the Currency also has a five-year term and can be removed only for cause. Similarly, the OCC is funded outside the congressional appropriation process.
Well then, is the OCC less powerful than the Bureau? While their authority is not congruent (otherwise, we wouldn't need the Bureau), the OCC indeed has sweeping power. It regulates and supervises all national banks, and also supervises federal branches and agencies of foreign banks. And, unlike the Bureau, the OCC's regulations cannot be set aside by the Financial Stability Oversight Council. The OCC has even outmuscled states; when states passed laws to prevent predatory lending in the years preceding the subprime crisis, the OCC announced that the laws did not apply to the banks it regulated. Moreover, under the Dodd-Frank Act, the OCC will be even more powerful, assuming responsibility for regulating federal savings and loans.
Nor is the explanation for the differing treatment simply that the issue of the Bureau has arisen because the President has nominated its director and the Senators will address the Comptroller of the Currency when that position falls vacant. The last Comptroller, John Dugan, left office last summer, and the President recently nominated a new one. Yet the Senators have not said they will oppose confirming a new Comptroller until that office's powers are constrained; in fact, when John Dugan was confirmed in 2005 by a Republican Senate, his confirmation was so uncontroversial it was decided on a voice vote.
So how to explain the difference? Only the Senators know what their motivations are, but when the evidence of pretext is so strong, it is difficult to resist more cynical conclusions. Perhaps the answer for the differing treatment of the two agencies lies in their politics: the Bureau promises to protect consumers, while the OCC has been thoroughly captured by the banks. Indeed, former Comptroller Dugan was a bank lobbyist before his appointment. That may explain why, when New York's Attorney General sought to investigate whether banks had violated fair lending laws, the OCC went to court to protect the banks, ultimately litigating the case to the Supreme Court. By contrast, it is difficult to imagine the Bureau suing to protect banks from a state trying to determine if banks have engaged in discriminatory practices.
The Senators properly have a role in advising and consenting to appointments, but they should recognize that if they want to challenge Congress's decision in structuring the Bureau as it has, the appropriate way to do so is to pass legislation, not hold up filling a job that is needed, and amply supported by precedent.