WASHINGTON — After doggedly opposing the creation of the Consumer Financial Protection Bureau in 2010, then fighting all last year to change its composition, the U.S. Chamber of Commerce softened its stance Thursday.
The bureau was a key element of the Dodd-Frank Act, the most sweeping overhaul of financial regulation since the Great Depression. Republicans spent much of last year blocking the Obama administration's efforts to confirm a director for the new agency.
President Barack Obama then used a controversial recess appointment Jan. 4 to install Richard Cordray as its director and to put three new commissioners on the National Labor Relations Board. There'd been intense speculation that the Chamber of Commerce would challenge the legality of those appointments. It raised the question of legality in a harsh statement last week.
On Thursday, however, Thomas Donohue, the CEO of the powerful organization, told reporters that "we are not going to sue today." In toned-down rhetoric, the often-cantankerous Donohue repeated reservations that the new consumer agency has insufficient congressional oversight since it's funded by the Federal Reserve and not appropriations-controlled by lawmakers, but he pledged a wait-and-see approach.
"One has to see what he (Cordray) does and what the three new guys at the NLRB do," Donohue said, adding that the Chamber of Commerce could yet decide to challenge the appointments. "We have not taken a decision on that at all."
Critics of the recess appointments contend that they were made while Congress technically was still in session — even though most members were out of town for the holidays — thus invalidating them.
The Justice Department's Office of Legal Counsel issued an opinion Jan. 6 at the request of the White House that said so-called "pro forma sessions" of the Senate didn't constitute legitimate sessions that would preclude presidential recess appointments.
"Although the Senate will have held pro forma sessions regularly from January 3 through January 23, in our judgment those sessions do not interrupt the intrasession recess in a manner" that would prevent recess appointments, the opinion said. "Thus, the president has the authority under the Recess Appointments Clause (of the Constitution) to make appointments during this period."
The Chamber of Commerce's subdued approach to the Consumer Financial Protection Bureau — created to protect against the sort of abusive and shoddy lending for mortgages, cars and payday loans that helped cause the 2008 financial crisis — is noteworthy. In August 2010, it immediately challenged another key element of the regulatory overhaul that would've allowed dissident shareholders to run their own slates of candidates for seats on corporate boards.
The Chamber of Commerce and the Business Roundtable joined forces, hiring lawyer Eugene Scalia, the son of Supreme Court Justice Antonin Scalia, to challenge the new rules from the Securities and Exchange Commission. A three-judge District of Columbia appeals panel vacated the SEC's "boardroom democracy" rules last July, and the SEC said in September that it wouldn't seek a rehearing.
Shortly after Donohue spoke Thursday, across town Cordray held his first news conference and also struck a conciliatory tone, noting that he'd already met with Donohue twice.
"I am a member of my local Chamber of Commerce in Grove City, Ohio; have been for 20 years," said Cordray, a former Ohio attorney general and state treasurer, adding that he established a business advisory council in Ohio and is sensitive to the challenges that business owners face. "I know it's not easy to run a business and be successful."
The U.S. Chamber of Commerce's members benefit from effective policing of lending and a better-educated consumer, Cordray said, adding that the new consumer agency will put great emphasis on promoting financial literacy. The agency on Wednesday announced new rules for examining non-bank lending, which hadn't been regulated federally before the finance overhaul passed.
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