Last December, the Senate rejected President Obama’s choice for director of the Consumer Financial Protection Bureau (CFPB), Richard Cordray[1]. Not be deterred, however, the president simply waited until Congress was in a recess (although the Senate was actually in a pro forma session, just as when the payroll tax cut was extended) and appointed him anyway, leading many to protest that the president is blatantly disregarding the Constitution and the rule of law. Recess appointments can only happen during congressional recesses, and critics of the move are arguing that the president bypassed the Senate, which had been unable to approve Cordray last summer, by appointing him when the Senate was not in a true recess. Cordray was the attorney general (AG) of Ohio from 2009 to 2011 and has made a name for himself by targeting lenders for non-transparency in lending. Cordray, who lost his bid for reelection as Ohio AG last year, has stated that he will focus particularly on “non-bank firms that often compete with banks but have largely escaped meaningful federal oversight”[2].
The controversial appointment has, not surprisingly, been greeted with outrage on the part of senators, many of whom objected to the creation of the CFPB on principal and fear that Cordray’s position is that of an “unaccountable bureaucrat.” Critics of the president’s latest appointment like popular radio talk-show host Rush Limbaugh fear that it could set a precedent for unconstitutional appointments in the future, including enabling the administration to appoint a new director of the Federal Housing Finance Agency (FHFA) and forcing through a broad home-refinancing plan that many believe would send taxes, the national debt and the housing crisis spiraling out of control[3]. However, analysts like Joshua Rosner, managing director at Graham Fisher & Company, call these concerns “irresponsible speculative leaps” that are, at best, a remote possibility.
The president has characterized his “recess” appointment of Cordray as a necessary move that indicates that he is “looking out for you, fighting for you” while “financial firms have armies of lobbyists in Washington looking out for their interests”[4]. The president added that he has an “obligation” to “do what I can without [the support of the Senate]” when that body blocks his appointments and obstructs “efforts to help the middle class.” Immediately following Cordray’s appointment, the CFPB expanded its bank supervision to non-banks as promised, wasting no time in adding additional authority under the new director.
Do you think that this appointment is valid and legal? Were the president’s actions appropriate? Is this just setting up for a massive mortgage-forgiveness program as Limbaugh suggests?
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[1] http://nationalmortgageprofessional.com/news27829/obama-sidesteps-recessed-congress-appoint-cordray-cfpb-head
[2] http://www.bloomberg.com/news/2012-01-06/obama-s-consumer-watchdog-targets-mortgage-firms-payday-lenders.html
[3] http://blogs.wsj.com/developments/2012/01/05/rush-limbaugh-mortgage-analyst/?mod=google_news_blog
[4] http://www.businessweek.com/news/2012-01-05/obama-says-cordray-appointment-will-help-protect-consumers.html
he has an “obligation” to “do what he can without [the support of the Senate]” when that body blocks his appointments and obstructs “efforts to help the middle class
the senate has held the country hostage by blocking everything to help the american people how many recess appointments by Bush? if all senators are not at work then i guess a common sense person would say they are at recess
the american people are tired of republican games and obstructing progress
actually all members of congress need to be fired to be honest
the president needs to keep doing recess appointments as long as the senate will not do its job for the people
the senate is just for protecting the rich
To the comment above. Check your facts. The repubs do not hold a majority in the Senate. That’s Harry Reid and the dems. If his own party is blocking his appointments and legislation, then they must have a problem with his ‘hope and change’. Obama is circumventing the legislative process and has been inventing his own gov’t since he took office. This administration thinks you and I are stupid and are not seeing what he is doing. Obama is trying to fundamentally change the USA and take us away from a constitutional republic. Our founding fathers are rolling over in their graves right now.
BRAVO for OBAMA about time somebody does something. NO WAY NO HOW to compromise with the tea party people. They have no concept of how politics work. It is the art of compromise. They are so stupid, they say our way or no way. So that is what we have nothing. Happy the President finally did something, and agree with appointment.
Typical of a narcissist…even if it is unconstitutional.
To the author: This website has become very political since your taking over. This article skews facts, is misleading, and does not tell the full story. Who are you to opine on the legality of the appointment or whether or not the US Senate is in session per legislative rules? Yesterday you wrote a piece denouncing the Fed’s recommendation on the role of GSEs and now your headline indicates the recommendations were much more comprehensive, but do not offer information about any of the recommendations. Your unbiased reporting/blogging can play a significant role to your readers as the recommendations specifically involve the housing industry.
No one expects you to be apolitical, but I think you are making a grave mistake by quoting Limbaugh as a reputable source in your columns. You are incorrect if you think only political conservatives follow this site and you only need read the comments to this story to become illuminated.
Joseph, Thank you for taking the time to read and comment on my news coverage. Please note that the coverage *is* unbiased and, had you read carefully, you would have noticed that we cited Rush Limbaugh as an example of a critic of the administration and offered a counterbalance to his point of view. Success in real estate investing and, for that matter, in any type of investing, is inextricably linked to politics. Responsible investors need to be aware of pertinent legislation and look to this publication for assistance in that matter. I fear that you will be woefully under-informed, at best, and misinformed, at worst, if you cease reading every time you encounter the name of a public figure whom you dislike. ~Carole VanSickle, Editor, Bryan Ellis Real Estate Letter
Check your facts folks. This appointment was legally rejected by the Senate in accordance with the Constitution and in light of the checks and balances between the three branches of the government. You can blame the Senate Republicans all you want. They learned the pro forma sessions from Senate Democrats who invented them and used them effectively against President Bush. These pro forma sessions prevented him from making more appointments. Recess appointments have been made by presidents of both parties for decades.
This is just the latest in this President’s imperial ruling of this country. His elitist attitude that only he knows what is good for us is nauseating.
to author: I do read carefully. Hyperlink title: “How the president’s controversial (and UNCONSTITUTIONAL) recess appointment could finish off the housing market.” You do your readers a disservice through patently biased reporting and sensationalism. You have no evidence of the unconstitutionality of the conferring of Director Cordray. “Finish off the housing market…” no evidence of that either, just sensationalistic fear-mongering and political pandering.
from Bryan Ellis>> Joseph, Joseph, Joseph. Your premise appears to be that your understanding of the Constitution is correct. Sadly, you’re mistaken. Do you know what a “pro forma” session of the Senate is? This is the type of session that was used a couple of weeks ago when Obama’s ridiculous payroll tax cut was passed. It’s also the type of session that was used on the day that Obama blatantly disregarded the advise-and-consent provision of the Constitution (see Article 2, Section 2). Another premise of yours appears to be that “fear-mongering” is inappropriate. Wrong-o, my friend. Obama just blatantly disregarded the Constitution. That’s an act worthy of fear, concern and political retribution. If, in your view, standing up for the Constitution is political pandering, then two things are true: You have no regard for the Constitution, and you don’t understand the words “political pandering”.
You are not in a position to tell me anything about my knowledge or where I get my information. If you are going to continually publish politically motivated blogs, you should prepare yourself for comments like mine to hold you accountable for what you write. Instead of considering my criticism, you attack me as unknowledgeable, “woefully under-informed, at best, and misinformed, at worst…” You know nothing about my background or me.
from Bryan Ellis>> You’re right, we don’t know anything about you or your background, nor is it relevant. We publish the truth, without regard to how people will take it. No apologies. And Joseph, you really should read the prior response a little more closely. Nobody said anything your knowledge, but my editor did say, quite correctly, that you risk being mis- or underinformed if you take exception based on seeing the name of a public figure you dislike. She was totally right.
You picked one aspect of my comment and ignored the rest. This is your forum, you do as you please. In my opinion, your columns are politically biased; the history of your work is readily available to be viewed by anyone. I read all of your columns everyday. I assure you the skills honed during my doctoral education include the ability to comprehend the written word, identify self-serving arguments, and identify pseudo arguments written solely for the purpose of “faking” readers into believing the author to be unbiased. I know better; your record speaks for itself.
from Bryan Ellis>> You’re right: Our record does speak for itself. That’s why we’re one of the fastest growing publications for serious investors. And we are biased: Biased towards obvious reality. If that’s self-serving, so be it. Nevertheless, we do appreciate that you read all of our columns every day. We couldn’t ask for anything more from you!
Is a pro forma session that lasts for seconds legal? It sounds like a strategic move by the Republicans to block progress. Did the Republicans have an appointment in mind that they could live with? No, they didn’t. It’s more of the same tactics. There’s many more appointments that Obama should have made without the Senate involved. I say it’s time to get some work done whether the Republicans agree or not. My view of the economy is that it’s getting better and picking up steam. Right now, ANYONE in the way needs to be cut down at the knees and pushed out of the way.
It was the Democrats who came up with the idea of this “semi-recess” to keep Bush from appointing so they should live with their own rules. Excuse me, rules are only made for Republicans. This is not the first time the president has ignored the Constitution and if the Republicans had any guts they would impeach him but I guess they remember the impeachment of Clinton and they are so god-awful afraid of losing their power, they refuse to do the right thing.
I can tell by reading the comments who is successful in RE and who is not. I’m glad for the housing mess. I’m saving money and building my business.
The RepubliThugs (and some DemocRATS) get their shorts all tied up in knots over this issue, when the legislature just voted on a bill that virtually shredded the constitution by passing a law that can detain American citizens indefinitely without charging them. Or how about going off to war without any declarations from congress. These are major breaches in the constitution, yet we spend time quibbling about yet another minor breach in the constitution. Come on people, let’s wake up and keep focussed! Our constitution has become toilet paper.
I have had nothing but bad luck ever since that thing came to power hate it very much
always thought that obama was the best car sales men to be elected to office.. we have a constitution for a reason.. and one should not abuse ones power or position…hey face it.. we are broke as a country??…??..
keep on speaking the truth..