“Which side are you on?” That question, posed by Florence Reece in a pro-union song she wrote in 1931, echoes across the country today, in the form of the Occupy Wall Street movement, and demonstrations like Take Back the Capital this week. Millions of Americans caught in the drip of an economic crisis caused by Wall Street’s actions, who have waited years for relief as they’ve struggled with unemployment, foreclosures, and financial devastation are speaking with one voice, demanding of our elected leaders an answer to that most relevant question: “Which side are you on?”
The Senate on Thursday blocked President Obama’s nominee to head the Consumer Financial Protection Bureau, as filibustering Republicans who oppose the very powers of the new agency successfully challenged one of the administration’s main responses to the financial crisis.
The nomination of Richard Cordray was rejected after Democrats failed to achieve the 60 votes they needed to move his nomination forward. The vote was 53 yes, 45 no.
President Obama left open the option of a recess appointment, although Republicans have thwarted that tactic recently by staying in rump sessions.
The man we nominated for the post, Richard Cordray, is a former Attorney General of Ohio who has the support of most Republican and Democratic Attorneys General throughout the country.
But the Republicans in the Senate refuse to let him do his job. Why? Does anyone think the problem before that led to this crisis was too much oversight of mortgage lenders or debt collectors? Every day we go without a consumer watchdog in place is another day when a student, or a service member, or a senior citizen could be tricked into a loan they can’t afford – something that happens all the time. Financial institutions have plenty of lobbyists looking out for their interests. Consumers deserve to have someone whose job it is to look out for theirs. And I intend to make sure they do.
There is no hyperbole in the president’s remarks. The CFPB needs its director. Denying the agency its director effectively hamstrings the agency, and blocks it from carrying out important parts of it’s mission. The CFPB opened it’s doors in July, and its staff is already working on a project to simplify credit card agreements to make them easier for consumers to understand — to know what they’re getting into, and what their rights are. But there’s vitally important work the CFPB can’t do without a director.
Because of political squabbling, the Consumer Financial Protection Bureau formally will launch without an appointed director. And the lack of leadership has real consequences.
The agency won’t have power, for instance, to crack down on mortgage brokers, some of which helped lead the nation into the housing debacle four years ago. It also won’t have authority over other largely unregulated sectors of the financial services industry, such as payday lenders and remittance companies such as Western Union, that it was created to police.
…And without an appointed director, the agency legally cannot exercise expanded consumer protection powers that Congress granted it in last year’s financial regulatory overhaul to try to prevent another crisis, government officials said.
Besides being unable to use its authority to regulate mortgage brokers and other financial firms outside the conventional banking industry, the agency would be denied, at least initially, broad authority to prohibit “unfair, deceptive or abuse acts or practices” or to issue rules requiring better disclosures of the terms of financial products, the inspectors general of the Treasury Department and Federal Reserve determined.
Republicans are holding the CFPB and the Americans it’s charged to protect hostage, as they demand changes that would further weaken the agency; making it easier for congress (a majority Republican congress, they hope) to direct its mission, or starve it out of existence. Senate Republicans are looking out for Wall Street, because that is what Wall Street gives them big bucks to do, as the Public Campaign Action Fund detailed.
Wall Street and its deep pockets fought the creation of the bureau, and its lobbyists have continued the industry’s efforts to undermine it. When the question is called Thursday, will Senators be voting for the consumers or their Wall Street donors that wrecked our economy?
Through the first three quarters of 2011, the finance, insurance, and real estate (FIRE) sector has given $17.7 million to members of the U.S. Senate. Financial interests make up the top giving sector to federal candidates so far this cycle, according to Public Campaign Action Fund analysis of data from the Center for Responsive Politics.
The commercial banking industry has donated nearly $1.8 million to Senators so far this year, and securities and investment industry donors have handed over $5.8 million.
The 44 Senate Republicans who signed a letter in May pledging to filibuster any CFPB nominee (plus Sen. Dean Heller who later added his name once appointed to the Senate) have received over $6.5 million from the financial industry in 2011 and nearly $125.6 million over their careers.li>
Sen. Richard Shelby (R-Ala.), the ranking member of the Senate Banking committee (and lead signer of the letter), has received at least $81,850 in 2011 and $6.2 million from the FIRE sector throughout his career.
Senate Minority Leader Mitch McConnell (R-Ky.), who said in June the more that can be done to slow down implementation of Dodd-Frank regulations “the better America will be,” has received at least $617,715 from financial interests this year and $6.4 million over his career. Majority Leader Harry Reid (D-Nev.) has received at least $82,334 this year from the sector and $5.6 million over his career.
Sens. Pat Roberts (R-Kansas) and John Thune (R-S.D.) both have fundraisers in New York City this weekend, according to invitations obtained by the Sunlight Foundation’s PoliticalPartyTime website. Will Wall Street donors be in attendance?
“Will Senators be voting for the consumers or their Wall Street donors that wrecked our economy?” We know the answer to that question now, just as we know the answer to the shorter version of the same question: “Which side are they on?” They are on the side of the one percent — most of whom reside on Wall Street — and against the majority of Americans who support a strong consumer protection agency (something even a majority of Republicans support).
Yet, to hear Senate Majority Leader Mitch McConnell tell it, in remarks that would impress even George Orwell himself, Senate Republicans who voted against American consumers were standing up for democracy.
“We’re not going to let the president put another unelected czar in place, unaccountable to the American people,” Senate Minority Leader Mitch McConnell (R-Ky.) said.
The consumer protection agency exists because a majority of democratically elected lawmakers passed a law and a democratically elected president signed it. Now a minority of Senators representing a minority of the country are exploiting procedural rules (i.e., using the filibuster) to prevent that law from taking effect.
That’s undemocratic. And I mean that with a small “d.”
Wall Street and the one percent want it that way, and the 44 Republicans who blocked Cordray’s appointment, and effectively blocked the CFPB from fulfilling its mission to protect consumers, voted to make sure it stays that way. President Obama still has the option of a recess appointment, if Republicans don’t decide to “work” through the holidays.
Which side are they on? Forty-five Senate Republicans answered that question once more time, with yesterday’s vote. But was there really ever any doubt?