Washington, DC – U.S. Senator Sheldon Whitehouse spoke on the Senate floor today in support of the confirmation of Richard Cordray to lead the new Consumer Financial Protection Bureau. The Bureau, which was established by the Wall Street Reform and Consumer Protection Act of 2010, will oversee the activities of banks and non-bank financial companies, including many mortgage servicers, private student lenders, debt collectors, payday lenders, and credit reporting agencies. It will have the power to protect consumers from fine-print tricks and traps, but under the law needs a Director to exercise its full authority. Senate Republicans are currently obstructing Mr. Cordray’s nomination in an attempt to weaken its consumer protections.
“While Senate Republicans filibuster, some of the worst financial actors in the country remain unaccountable for their deceptive and harmful practices,” Whitehouse said today. “Consumer protection shouldn’t be a partisan issue, and I hope that our colleagues across the aisle at least allow us to have an up-or-down vote on the nomination. Every day that Republicans continue their obstruction, Americans from all walks of life – from students and seniors citizens to our men and women in uniform – continue to be subject to unchecked and unregulated deceptive financial products.”
Whitehouse has been a strong voice for the rights of consumers throughout his career, and was a cosponsor of the Financial Product Safety Commission Act of 2009, the first Senate bill to propose the Bureau. He also recently introduced legislation to crack down on unfair credit card interest rates, and argued in a Providence Journal op-ed this week that consumers deserve a “straight deal” from their credit card company.
The full text of Whitehouse’s speech is below, as prepared for delivery. Video is available on YouTube.
Mr. WHITEHOUSE. Mr./Madam President, I rise today in strong support of President Obama’s nomination of Richard Cordray of Ohio to be the Director of the Consumer Financial Protection Bureau. A former Attorney General, Solicitor General, and State Treasurer of Ohio, Mr. Cordray is unquestionably well-qualified to take on the position for which he’s been nominated. Unfortunately, we are stuck in a Republican filibuster of Mr. Cordray’s nomination, with the stated ulterior motive to weaken the new agency’s power to protect consumers.
Republicans’ obstruction of Mr. Cordray’s nomination has nothing to do with Mr. Cordray himself. Former Republican Senator and current Ohio Attorney General Mike DeWine called Mr. Cordray “very well-qualified for this job,” and last month 8 Republican Attorneys General joined 29 of their Democratic colleagues in writing to Leaders Reid and McConnell with their support for this nomination. Mr. Cordray has been endorsed by groups as varied as the AFL-CIO, the Credit Union National Association, the National Fraternal Order of Police, and the AARP.
Notwithstanding widespread bipartisan support on Main Street, Senate Republicans seek to prevent Mr. Cordray from taking office. It is their service to Wall Street. As one Republican member of the Senate Banking Committee said, “[m]y colleagues and I stand by our pledge that no nominee to head the CFPB will be confirmed by the U.S. Senate – regardless of party affiliation – without basic changes to the bureau’s structure.”
These “basic changes” that the Republicans have demanded include making the agency subject to the budgetary whims of Congress and replacing the Director’s position with a board that would ensure that Wall Street is represented. These are not constructive changes, but rather an attempt to weaken a regulator designed to protect consumers.
I hope that my Republican colleagues reevaluate their reasons for obstructing Mr. Cordray’s nomination, but in case they continue their filibuster, let’s take a moment to review the consequences for the American people.
As many of our constituents know, we established the CFPB in the Wall Street Reform and Consumer Protection Act as a new agency to protect American consumers from misleading and potentially ruinous financial products. We designed this new agency to be to mortgages, credit cards, student loans, debt collection, and credit reporting what the Consumer Product Safety Commission is to toaster ovens, toys, baby strollers, batteries, and swimming pools.
Harvard Law professor Elizabeth Warren first proposed such an agency, and I was proud to cosponsor Senator Durbin’s Financial Product Safety Commission Act of 2009 – the first bill to bring Professor Warren’s idea to the Senate.
We designed the CFPB to investigate consumer financial products and gave it the power to make rules ensuring that financial products are transparent and fair, including, for the first time, providing federal oversight of previously unregulated loans and financial services from non-bank financial institutions. When you look at the length, and the amount of fine print, of consumer contracts, and the extent to which traps and tricks get hidden in all that fine print, the reason for this is obvious to most Americans.
Under the temporary direction of the Treasury Secretary, the CFPB is already up and running and regulating the largest banks in the country – those with over $10 billion in assets – as well as credit unions. Unfortunately, its authority to protect consumers from other financial products is statutorily unclear in the absence of a Director.
In other words, the CFPB is already looking out for American consumers to make sure that big banks and credit unions are playing by fair rules, but has not yet been able to regulate non-bank companies – entities like many mortgage servicers, private student lenders, debt collectors, payday lenders, and credit reporting agencies.
While Senate Republicans filibuster, some of the worst financial actors in the country remain unaccountable for their deceptive and harmful practices: predatory lenders near military bases continue to charge our service members effective rates of up to 800%; private student lenders continue to withhold clear information about repayment terms; debt collectors continue to bully and harass those on the brink of bankruptcy, and so called “payday” lenders continue to dupe senior citizens into taking out loans bearing triple-digit interest rates. This is the status quo that Senate Republicans are preserving by blocking Mr. Cordray’s nomination.
Consumer protection shouldn’t be a partisan issue, and I really hope that our colleagues across the aisle at least allow us to have an up-or-down vote on the nomination. Every day that Republicans continue their obstruction, Americans from all walks of life – from students and seniors citizens to our men and women in uniform – continue to be subject to unchecked and unregulated deceptive financial products. Abusive lending practices that strip wealth from communities and purchasing power from consumers continue to hold back our struggling economy.
Let’s confirm Mr. Cordray so he can begin the hard work of leveling the playing field for the American consumer, and help ordinary Americans get a straight deal in our increasingly complex economy. I thank the chair, and I yield the floor.