Frank Keating, the president and CEO of the American Bankers Association, questioned President Obama's recent recess appointment of Richard Cordray to head the Consumer Financial Protection Bureau.
“The controversial nature of today’s recess appointment reinforces the banking industry’s concerns about the Bureau’s structure and lack of accountability," Keating said. "It puts the bureau’s future actions in constitutional jeopardy, threatening its work, complicating compliance efforts of banks and further undermining the entity’s authority and credibility. Moreover, with this appointment, the president has also altered the composition of the board of the FDIC, potentially undermining its official acts. This is at the same time that FDIC appointments, including that of its chairman, are pending in Congress.
The CFPB has held supervisory authority over the nation's largest banks – those with assets totaling more than $10 billion – since July 21, but Cordray's appointment activates the bureau's full scope of powers over both banks and non-bank entities.
“It’s critical that Congress strengthen accountability at the CFPB by instituting a board or commission to address the director's unchecked authority to make decisions that could limit financial choices available to consumers," Keating said. "The FDIC, SEC, FTC, Federal Reserve and the Consumer Product Safety Commission all have boards.
“By abandoning the opportunity to compromise on the governance structure of the CFPB, the potential to create regulatory clarity for our industry, allow for the regulation of non-banks, and ultimately benefit consumers is damaged.”