If you'd like to know why Republicans are trying to shut down the Consumer Financial Protection Bureau, take a look at three things the agency has already accomplished in its first 18 months:
¶It called a halt to predatory practices by mortgage lenders, ensuring that borrowers are not saddled with loans they can't afford and preventing brokers from earning higher commissions for higher interest rates.
¶It won an $85 million settlement from American Express, which it accused of deceptive and discriminatory marketing and billing practices.
¶It opened an investigation into questionable marketing practices by banks and credit card companies on college campuses, which often take place after undisclosed financial arrangements are made with universities.
The consumer bureau has taken seriously its mandate to protect the public from the kinds of abuses that helped lead to the 2009 recession, and it has not been intimidated by the financial industry's army of lobbyists. That's what worries Republicans. They can't prevent the bureau from regulating their financial supporters. Having failed to block the creation of the bureau in the 2010 Dodd-Frank financial reform bill, they are now trying to take away its power by filibuster, and they may well succeed.
The bureau cannot operate without a director. Under the Dodd-Frank law, most of its regulatory powers — particularly its authority over nonbanks like finance companies, debt collectors, payday lenders and credit agencies — can be exercised only by a director. Knowing that, Republicans used a filibuster to prevent President Obama's nominee for director, Richard Cordray, from reaching a vote in 2011. Mr. Obama then gave Mr. Cordray a recess appointment, but a federal appeals court recently ruled in another case that the Senate was not in recess at that time because Republicans had arranged for sham sessions.
That opinion, if upheld by the Supreme Court, is likely to apply to Mr. Cordray as well, which could invalidate the rules the bureau has already enacted. The president has renominated Mr. Cordray, but Republicans have made it clear that they will continue to filibuster, using phony arguments to keep the agency from operating.
Earlier this month, 43 Senate Republicans wrote a letter to the president, vowing to block any nominee until "key structural changes" are made, including a bipartisan commission to run the bureau instead of one director, and Congressional control of its appropriations. (It is now financed with bank fees paid to the Federal Reserve.)
These arguments are designed solely to give Congress more opportunities to stop financial regulation. A board evenly divided between the parties would quickly reach a stalemate and become inoperative, much as the Federal Election Commission has become. Besides, board members can be filibustered as easily as a director.
Other bank regulators, like the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, are not subject to the appropriations process, as a shield against political interference. Congress does, however, control the budgets of the Securities and Exchange Commission and the Commodity Futures Trading Commission, and House Republicans have voted to strip those agencies of money needed to regulate derivatives and curb abuses. The consumer bureau was enacted by law, and now Republicans are using backdoor methods to destroy it. There is no greater argument for Senate Democrats to ban filibusters of presidential nominees, particularly when the future of an entire agency is at stake.
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