By Jedidiah Bracy, CIPP/US
President Barack Obama yesterday appointed Richard Cordray as the first director of the Consumer Financial Protection Bureau (CFPB). The recess appointment of the former Ohio attorney general will allow the consumer agency to oversee non-bank organizations such as mortgage brokers, debt collectors, credit reporting agencies and payday lenders, The New York Times reports.
In a letter posted on the CFPB’s website, Cordray wrote, “starting today, we can now exercise the full authorities granted to us under the law and begin to supervise these nonbanks.”
Alan Charles Raul, a Washington lawyer and former government official, told the Daily Dashboard that Cordray’s appointment “will help provide leadership for the CFPB and likely facilitate high-level coordination with the Federal Trade Commission and banking agencies regarding overlapping jurisdiction on privacy and other issues.”
The recess appointment of Cordray has some questioning the move’s legality, says Morrison & Foerster Partner Andrew Smith.
Since there are questions around whether the Senate was truly “in recess” during the appointment, and since section 1066 of the legislation provides that the appointment be confirmed by the Senate, Raul adds, “It would not be surprising if many of these issues end up being litigated and sowing confusion over the director’s and agency’s authority.”
Editor’s Note: Andrew Smith will be a presenter during the breakout session, Who’s on First? New Roles and Authority for the CFPB, FTC, Banking Agencies and Securities, at the IAPP Global Privacy Summit.