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A Times Editorial

Breaking a political stalemate, helping consumers

In general, presidents should not circumvent the Senate confirmation process and make appointments when Congress is in recess to avoid a political fight. The confirmation process serves a legitimate role in vetting key presidential appointments, and recess appointments should be rare. That said, President Barack Obama's recess appointment of Richard Cordray as director of the new consumer protection agency is defensible as well as a political maneuver to break a stalemate that has nothing to do with Cordray.

The move enables the federal government to begin enforcing the most meaningful protections in the Dodd-Frank law aimed at halting the worst abuses of payday lenders, mortgage service companies and others in the financial industry. Obama's timing also amounts to a constitutional challenge over when Congress is in session and when it is faking it to block recess appointments that are allowed by the Constitution.

The Consumer Financial Protection Bureau created by the Dodd-Frank legislation in 2010 has been working mostly around the edges, supervising mortgage lending and banking fees. The law expressly reserved any broad new regulation of both banks and nonbank financial services until the appointment of a permanent agency head, and Senate Republicans have refused to confirm any appointment unless the agency's authority and independence is compromised. Cordray is a reasonable choice with solid credentials, and now the bureau can start targeting unfair or deceptive trade practices by firms offering a host of consumer products, from mortgages and short-term loans to charge cards and debt relief services.

Many of these products have long capitalized on opaque and confusing lending terms, preying on consumers who have few alternatives when faced with immediate needs for cash or credit. The new agency already has begun work to simplify some loan applications, and over time its oversight of the industry should help consumers get the information needed to make smarter financial choices.

Maximizing the full force of consumer protections that have been the law of the land and doing it under the direction of a leader that Democrats and Republicans alike agree is qualified should not be controversial. But Republicans reacted furiously Wednesday, claiming the recess appointment is unconstitutional because a handful of Republicans have met over the holidays to keep Congress in pro-forma session. The administration dismissed the sessions as sham attempts to block Obama's nominees from taking their posts, and the courts likely will decide that disagreement.

Obama announced Cordray's appointment Wednesday at what was an overt political rally in the swing state of Ohio and clearly picked a fight with Republicans as he gears up his re-election campaign. Neither side has clean hands; Senate Democrats played the same games to bar President George W. Bush from making recess appointments. But this standoff never should have reached this point. The Republicans' opposition is not to Cordray but to the safety net that installing him creates for consumers. That is a fight that voters should resolve in November's elections. Now the nation is best served by following through with an existing law to protect consumers and instill faith in the financial system — even if it requires a recess appointment by the president to get moving.

Breaking a political stalemate, helping consumers 01/05/12 [Last modified: Thursday, January 5, 2012 5:10pm]
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