Last week, President Obama bypassed congress and appointed Richard Cordray as the chief of the Consumer Financial Protection Bureau. Senate Republicans blocked a confirmation vote on Cordray last month. The recess appointment raised the ire of the GOP who say it was unconstitutional. Cordray has promised a strong agenda, warning financial institutes there would be “real consequences” if they break the law. The CFPB focuses on abusive, unfair or deceptive practices in the financial sector, including education loans, prepaid credit cards and mortgage services. Diane and her guests look at the CFPB, why opponents may challenge Cordray’s appointment and what this means for consumers.


  • Mark Calabria Director of financial regulation studies, Cato Institute.
  • Travis Plunkett Legislative director, the Consumer Federation of America.
  • Bruce Fein Former associate deputy attorney general, Republican counsel during the Iran-contra hearings, and founding partner with the Lichfield Group
  • Laurence Tribe Professor of Constitutional Law at Harvard University and author of more than 100 books and articles, including "The Invisible Constitution,""American Constitutional Law," and "On Reading the Constitution."


  • 10:06:55

    MS. DIANE REHMThanks for joining us. I'm Diane Rehm. The Consumer Financial Protection Bureau has a new chief. President Obama announced the recess appointment of former Ohio Atty. Gen. Richard Cordray to the post last week. Joining us to talk about the CFPB's agenda, why Cordray's appointment might be challenged and what it means to consumers, here in the studio: Travis Plunkett of the Consumer Federation of America, Mark Calabria of the Cato Institute and Bruce Fein of the Lichfield Group.

  • 10:07:45

    MS. DIANE REHMJoining us from a studio in Cambridge, Laurence Tribe of the Harvard University Law School, and, of course, throughout the hour, we'll be taking your calls, questions. Join us on 800-433-8850. Send us your email to Before we begin our conversation, I do want to say a word of regret at the passing of our dear friend Tony Blankley. He was one of our regular Friday News Roundup participant for years.

  • 10:08:35

    MS. DIANE REHMAnd I want to pass on my condolences and those of "The Diane Rehm Show" staff to his wife and family. We will miss Tony. Now, on to our discussion. Travis Plunkett, give us some background on this Consumer Federation Protection Agency and what it was supposed to be doing.

  • 10:09:09

    MR. TRAVIS PLUNKETTIt was supposed to be doing a better job protecting consumers from financial abuses than existing federal regulators had done. If you remember in the run-up to the financial crisis, we had huge problems all over the country with subprime mortgage lending. It is -- we're still feeling the results now given the ongoing foreclosure crisis. There were significant concerns about lending practices by credit card companies and also by so-called non-banks.

  • 10:09:40

    MR. TRAVIS PLUNKETTThese are financial companies that aren't technically depository institutions, such as payday lenders or even mortgage companies. In fact, the mortgage companies involved in subprime mortgage lending were among the most abusive.

  • 10:09:55

    MR. TRAVIS PLUNKETTSo a key reason for creating the Consumer Financial Protection Bureau was to house consumer protection all in one place -- previously, it had been split between a number of five federal agencies -- and also to provide the same rules of the road, the same level playing field for both banks and non-banks so that, from now on, whether you were regulated at the state level or the federal level, whether you were a mortgage lender or a payday lender, the rules were always the same.

  • 10:10:27

    MR. TRAVIS PLUNKETTAnd there was one federal agency focusing on what was going with financial services and consumers in order to prevent the kind of problem that had huge repercussions in the economic crisis.

  • 10:10:41

    REHMAnd it was established as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act?

  • 10:10:49

    PLUNKETTEnacted in July of 2010, the agency became operational in July, a year later, 2011. That month, the president nominated Richard Cordray, the former attorney general of Ohio, to be the director of the agency. The Senate refused to vote -- to have an up or down vote on that nomination through a procedural vote in December of last year. And then, of course, this month, we saw the president taking his step to offer a recess appointment of Cordray.

  • 10:11:26

    REHMAnd, Mark Calabria, I gather there was no real objection to Cordray personally, is that right?

  • 10:11:36

    MR. MARK CALABRIAThat's what Republicans are saying. I mean, I'm not a fan of Cordray and probably would -- if I was sitting in Senate, would not vote to confirm him simply on his qualifications. But the Republican caucus in the Senate is saying this is not about anybody. They are saying you could put forth, you know, a Republican as a nominee, and they would not support anybody until there were structural changes.

  • 10:11:56

    REHMStructural changes, like what?

  • 10:11:58

    CALABRIAThere are essentially three changes that are being asked for. The first of all would be you change from a single director to a board, which I will note as -- in the House-passed Democrat version of Dodd-Frank, it was a board. In the bill that was introduced by the late Sen. Kennedy, it was a board. So this is not something that has been controversial necessarily in the past. The second request is that the agency be pulled into the appropriations process, which means essentially that Congress will determine its funding level.

  • 10:12:25

    CALABRIAUnder the current structure, it's essentially funded by the Federal Reserve, which is incredibly very different. There's no other agency, with the exception of the Federal Reserve itself, that's funded this way. And so -- and the (word?) is that it reduces the accountability of the appropriations process. And also, this is someone who spent a number of years as staff on an oversight committee.

  • 10:12:46

    CALABRIAUnfortunately, those oversight committees don't always do a lot of oversight that they should and often, the only oversight that happens is at the appropriations level. And then, lastly, what the Republicans are asking for is having some check, some balance. And there are some checks and balances in Dodd-Frank trying to balance what is perceived as consumer protection versus bank safety.

  • 10:13:08

    CALABRIAAnd so there's a sense that if you push banks to maybe make loans -- and Travis and I could probably debate over whether subprime loans were driven by the private sector or the government. But if one's perspective is that, in the pursuit of the consumer protection, riskier lending actually gets pushed, that results in more bank failures. So what the Republicans are asking for is to create a process where the bank regulators have more input into the regulations of the agency.

  • 10:13:31

    REHMAnd, Travis.

  • 10:13:31

    PLUNKETTDiane, just a little background in why those provisions were in the law. We have a history in recent years of consumer protection agencies having their powers and their authority rolled back by special interests who go to Congress and act -- ask for, you know, writers, appropriations writers in other targeted reductions in their powers because they don't like what the agency is doing.

  • 10:13:57

    CALABRIACould we have some examples?

  • 10:13:58

    REHMHold on. Hold on.

  • 10:13:59

    PLUNKETTWell, the Consumer Product Safety Commission is one example. There's a host of items that have -- you know, industry has carried successfully that, over time, affected the ability of the agency to function, including serious reductions in their overall funding. But the point was to insulate the agency somewhat from special interest pressure through the appropriations process while making it accountable still to Congress and the public.

  • 10:14:31

    PLUNKETTFor instance, there's a cap on the budget, the amount of money the agency can spend under this funding source that Mark mentioned through the Federal Reserve. The thought of having bank regulators have a veto, a significant veto, over the ability of the consumer financial protection bureau to push consumer protections was anathema to many of us because these were the same bank regulators who missed the subprime mortgage crisis, who missed serious problems with credit cards and who utterly failed to do a good job in protecting consumers.

  • 10:15:05

    PLUNKETTSo some of the senators want the, you know, the bank regulators to have more of a veto authority over what the CFPB does. That doesn't seem like a good idea.

  • 10:15:14

    REHMHow do these payday lenders work?

  • 10:15:19

    PLUNKETTWell, they work in two ways. First, they operate storefronts all over the country where they encourage people to come in and take out loans. They're also increasingly operating over the Internet, so you can get a loan on the Internet. These are loans that start at around 400 percent interest, and they are designed to encourage you to come back and renew the loan. It's a very, very serious form of debt.

  • 10:15:45

    REHMAnd you're saying that, up to now, there has been no oversight of those payday loans?

  • 10:15:53

    PLUNKETTNo federal oversight.

  • 10:15:54

    REHMNo federal oversight.

  • 10:15:54

    PLUNKETTThere has been state oversight, which has been spotty. Some states have done a reasonably good job, and many haven't.

  • 10:15:59

    REHMOK. Mark?

  • 10:16:01

    CALABRIAYeah. Let's dig a little deeper at that and it goes -- as Travis mentioned, there is extensive state oversight. I mean, for instance, by now, every state in the country license mortgage brokers, and also they're saying that, I think, we probably have wide agreement that payday lenders and check cashers did not cause the financial crisis. And so this is about issues beyond the financial crisis.

  • 10:16:20

    CALABRIABut, historically, if you read a lot of banking regulation and banking statute, which I've been painfully had to do over by years, you see terms like federally related mortgage and federal depository repeatedly come up. And that's because there is no level playing field. Banks have deposit insurance. They get bailed out. We don't bail out payday lenders. We don't insure their risk. And so there's not that federal nexus that you have.

  • 10:16:42

    CALABRIAMost of federal financial consumer protection is built upon the nexus of we give you deposit insurance. The taxpayer backs your risks. Therefore, you subject yourself to a whole body of regulation that you wouldn't do otherwise. Now, payday lenders or anybody else, check cashers, who, again, are regulated extensively at the state level, they're not part of that deal. They're not part of that.

  • 10:17:04

    REHMBut what about the unfair deceptive practices of mortgage lenders, Travis?

  • 10:17:12

    PLUNKETTWell, there were non-banks and banks that participated in those practices. And now, the CFPB has the authority to look at both. There was some question before Cordray was appointed as to whether it would have the authority under the law to look at non-banks. And Cordray announced, as soon as he was appointed, that they were immediately beginning their supervision program for non-banks, including non-bank mortgage lenders, payday lenders and student lenders.

  • 10:17:42

    PLUNKETTWhat that means is that they will be, over time, sending people to look at the books of these companies to evaluate whether they are in compliance with the federal consumer protection laws.

  • 10:17:53

    REHMWhat's wrong with that, Mark?

  • 10:17:54

    CALABRIATo, first, to parse out an important difference, mortgage brokers were pulled under federal regulation in the 2008 SAFE Act so -- and which transferred to the new agency, so the regulation of mortgage brokers at the federal level is not contingent upon Cordray's nomination. It's unlike other non-banks that's been pulled out. And so I would say my concern with some of this is that it's not simply consumer protection. We're making questions about the availability of credit. We're making value judgments about certain products. I mean, I'll give you an instance.

  • 10:18:23

    REHMVery briefly, please.

  • 10:18:24

    CALABRIAOK. For instance, very briefly, my friends, Travis and such, have always been opposed to prepayment penalties in general. They don't believe consumers benefit from that, whereas I think they're substantial (unintelligible) that they get lower rates.

  • 10:18:34

    REHMMark Calabria, he is director of financial regulation studies at the Cato Institute. When we come back, we'll take up the issue of the constitutionality of the appointment. Stay with us.

  • 10:20:04

    REHMAnd welcome back. We are talking about the creation of the Consumer Financial Protection Bureau and the appointment, a recess appointment, by President Obama of former Ohio Atty. Gen. Richard Cordray to the post of chief just last week. And, of course, there's been a lot of controversy about that appointment because it was done during a so-called recess. Bruce Fein, why is this being questioned?

  • 10:20:48

    MR. BRUCE FEINWell, it's the language of the Constitution. If you have an audience out there, read Article II, Section 2. It provides: The president shall have power to fill up all vacancies that may happen during the recess. It's been chronicled here. This vacancy occurred well before any arguable recess. If this length of non-presence of the Senate satisfies that standard, it was a vacancy that enabled the president to submit -- and he did submit a name to the Senate for consideration. Because of the Senate's filibuster rules, it never came to a floor vote.

  • 10:21:23

    MR. BRUCE FEINBut think of this, Diane, suppose it did come to a floor vote and there was rejection, you know, 70-30 against Mr. Cordray, could the president then wait until there is an intersession recess of a few days and then appoint him on an interim basis for the next year? And it can be of something far more serious in its portents than the Consumer Financial Protection Bureau. Suppose, you know, Prof. Tribe is on the line here, a very esteemed constitutional scholar. Suppose a vacancy occurred in the Supreme Court and Prof. Tribe is nominated by President Obama to fill the seat.

  • 10:21:57

    MR. BRUCE FEINThere's a vote, and perhaps for whatever reasons -- I'm sure it's not his qualifications he's voted down -- could then, when an intra-session recess, could he be nominated and sit on the court and maybe cast a deciding vote in the case challenging the constitutionality of the individual mandate in the current Affordable Health Care Act?

  • 10:22:16

    MR. BRUCE FEINSo I think if you look at the purpose, the language of the Constitution -- and it was explained, as Alexander Hamilton in the "Federalist Papers," as something enabling the president not to be paralyzed if a vacancy occurs during a recess to have someone filled it until the Senate could return and then give full deliberation to the nominee.

  • 10:22:35

    REHMAll right. And turning to you, Prof. Tribe, is the appointment constitutional?

  • 10:22:42

    PROF. LAURENCE TRIBEWell, Diane, I believe it pretty clearly is the technical question of when something may happen has not in the past been the decisive factor. The whole point of the president's specific power to make recess appointments has, ever since 1867, been applied by presidents and attorneys general -- actually, a dozen presidents -- in varied circumstances, including vacancies that occur during a session as well as between sessions.

  • 10:23:18

    PROF. LAURENCE TRIBEAnd the fundamental purpose of it is to prevent the fact that the Senate is not in a position to deliberate fully and to vote up or down from paralyzing the executive branch. It's very clear that when the Senate engineers a sham, series of supposed sessions during which it specifies that it's going to do no business, these sessions are simply -- a gavel is struck, the empty chamber is called to order, and then there is a recess for three days.

  • 10:24:01

    PROF. LAURENCE TRIBEThose sham sessions don't interrupt the recess. And what's very clear is, as your earlier discussion with Mark Calabria and Travis made clear, that this is a very important agency, and many of its statutory powers were simply frozen in place, couldn't be exercised, until a director was appointed. So the Senate was contriving by holding these sham sessions, essentially to hold the executive branch hostage, hold consumers in America hostage.

  • 10:24:37

    PROF. LAURENCE TRIBEThey wouldn't give an up or down vote to anyone. It wasn't simply a matter of Richard Cordray. And because the paralysis of the Congress then became a paralysis of the whole body politic, the president really had no realistic choice other than to use this explicit constitutional power.

  • 10:24:57

    REHMAnd that really is at the heart of the question, is it not, Bruce Fein? Was the Senate in recess?

  • 10:25:11

    FEINFor purposes of the clause, I think the answer is no, and I think Prof. Tribe explained why. The Senate had a full opportunity to vote up or down on this particular nomination. It wasn't like it was circumventing the president's authority to nominate. It was the Democrats and the Senate who control the Senate and the rules of the Senate, the same party that's in the White House that created the law jam though the filibuster rule.

  • 10:25:36

    FEINAnd the president if -- and he's a Democrat as well -- has not gone to the majority in the Senate and said, hey, you need to change these rules, I want an up or down vote. It's a little bit odd to suggest that Democrats in the Senate, who are as loyal as it can be to President Obama, are the ones somehow subterfuging (sic) their own authority to decide whether to vote on this particular nominee.

  • 10:25:56

    FEINBut I want to go back to what Prof. Tribe said. Surely, the purpose is to make certain that the inability of the Senate to have an opportunity to give full consideration of a nominee is not -- is fully honored, and that can't be done if vacancy occurs during a recess where the Senate is not around. But that doesn't describe this situation. Everybody knows the debate that was had with regard to the nomination.

  • 10:26:20

    FEINIt was there at very, very great exhaustive extent, and it didn't prevail. My view is that the real problem is the Senate filibuster rule and that, if there wasn't a filibuster rule, there'd have been an up or down vote and he probably would have prevailed. But you don't overcome what I think is an improvident filibuster rule by distorting the recess appointment's power.

  • 10:26:40

    REHMWhat about that, Prof. Tribe?

  • 10:26:41

    TRIBEDiane, could I comment on that?

  • 10:26:43


  • 10:26:44

    TRIBEThe problem is the combination of the filibuster rule with the way in which the Senate was conducting these sham sessions, and it's not a question of pointing a finger of blame either at Harry Reid as the majority leader or at McConnell as his Republican counterpart. It's not a question of sort of which party caused the problem. The problem is a systemic one.

  • 10:27:10

    TRIBEAnd the fact that the Senate actually had an earlier vote on Cordray, and 53 senators favored him, doesn't prevent the fact -- doesn't prevent the paralysis from continuing during what is genuinely a recess.

  • 10:27:30

    REHMHere is the next question for you, Bruce Fein. Is this going to court?

  • 10:27:39

    FEINProbably. The Supreme Court has made it quite clear that an individual member, say Mitch McConnell, of the Senate would not have standing to challenge this appointment. The Senate, probably through a committee or an institution, could bring suit. But the Democrats are unlikely to sue a Democratic president over this, especially since the majority voted in his favor when the issue arose.

  • 10:28:01

    FEINNow, once the director then issues regulations, perhaps beguns (sic) to supervise a non-bank that is allegedly beyond his constitutional authority because he's there, invalid. Then that probably would be sufficient, concrete entry to bring the lawsuit. Whether it would be decided before November elections is an open question. Also, it's possible that if the Republicans obtain control of the Senate in November, a lawsuit could be brought by a Senate committee or the Senate as an institution in the aftermath of taking majority control of the Senate.

  • 10:28:33

    REHMSo two very different views on whether the appointment is...

  • 10:28:38

    TRIBEDiane, let me just say, I -- they're not different. Our views are not different on whether someone could sue, but we're forgetting that there was also a recess appointment that did happen, even in the technical sense, during the recess, and that was the vacancy in the NLRB. And that issue could equally come to court, and it might get to court first.

  • 10:28:59

    REHMDo you think, Prof. Tribe, that the nomination itself is going to be challenged in court on the issue of the recess appointment?

  • 10:29:15

    TRIBEI'm quite confident it will. The various groups have already talked about suing because they claim that any regulation that is issued by the Consumer Financial Protection Bureau under the direction of Richard Cordray will be invalid, especially those regulations that are of non-bank lenders, payday lenders, credit reporting agencies, the so-called shadow banks. That will certainly be challenged, and I think that a lot of these issues can be sorted out in court.

  • 10:29:49

    TRIBEBut I think no court looking at this is going to be fooled into thinking that these sham sessions interrupted what was obviously a full-month recess of the United States Senate.

  • 10:30:01

    FEINBut I think, equally, they will not be fooled by the idea that the Senate didn't have a full opportunity to vote on the nomination up or down, and they refused, with their own internal rules, to give a confirmation vote. And that was the purpose of the Appointments Clause.

  • 10:30:12

    TRIBEWell -- but the Senate has no power to have a wholesale rule that says, we simply won't consider any appointment. I mean, if that were the case, then, forgetting who happens to be in charge of the Senate, the Senate could simply say, for the next six months, Mr. President, we don't care to listen to any of your appointments. We have the theoretical power to do so, but we won't. I mean, that goes beyond the power of any House to create its own rules...

  • 10:30:38

    FEINYes, but you could have the same problem. A president could say, I'm just going to not nominate anybody to fill Supreme Court seats. I'm just going to leave it vacant so they can't decide anything, you know? And that could be a political question. It could be unconstitutional, but you're not going to get a court to order the Senate to vote on nominations...

  • 10:30:54

    TRIBEI'm not saying that they...

  • 10:30:54

    FEINAnd it may well be in this case that a court would hold this as a political question and will just leave it to the House and the Senate and the president to sort it out, not get the courts involved.

  • 10:31:03

    PLUNKETTIn fact...

  • 10:31:03

    TRIBEWell, that would leave this appointment in place. But I'm not suggesting that the Senate would be ordered to vote, only that it's sort of self-amputation not prevent the president from fulfilling his duty and to execute the laws of the United States.

  • 10:31:18

    REHMAll right. Now, Travis, considering everything you've heard, are you concerned about the ability of Cordray to carry out his function?

  • 10:31:30

    PLUNKETTAbsolutely not. This is a mere continuation of the politics that have surrounded the creation of this agency since the very beginning.

  • 10:31:38

    REHMBut if every decision he makes would be challenged, what good is the agency?

  • 10:31:47

    PLUNKETTWell, the unfortunate fact is, Diane, that since the beginning, Congress has been split with a majority enacting the Dodd-Frank act and saying, we want a Consumer Financial Protection Bureau, and a minority doing everything in their power to either weaken the agency or stop it from being created in the first place. So if you look at the macro political situation, this isn't really any different.

  • 10:32:11

    PLUNKETTCordray has, you know, a big mission now. He's the director, and he has a lot on his plate. And I think if you take a step back and say, what do Americans want, they're going to say, what are you doing for me? How are you improving my life? How are you helping me deal with financial decisions? How are you helping stop financial abuses? I mean, we're encouraging Cordray to look to the public in terms of accountability and to sort of screen out the noise and do his best over the next year or two.

  • 10:32:41


  • 10:32:42

    CALABRIALet me also -- 'cause I think this is an important consideration -- that the Dodd-Frank act also put Cordray on the FDIC, the Federal Deposit Insurance Board. So it's not only this agency whose decisions are called into question, but also the FDIC. So, again, going back to the question, maybe bank regulators having a say in consumer protection, consumer protection regulators certainly has a say in bank regulation, so even large banks will be able to sue any decision of the FDIC that is made with Cordray at the seat. But...

  • 10:33:12

    REHMMark Calabria. He's director of financial regulation studies at the Cato Institute. And you're listening to "The Diane Rehm Show." All right. We're going to open the phones. We've got lots of callers here. Let's go first to South Miami, Fla. Good morning, Jerry. You're on the air.

  • 10:33:36

    JERRYHi. Good morning. A couple of points. Mr. Fein's arguments are the same ones I was making when George Bush was making all of his recess appointments.

  • 10:33:47

    FEINI wasn't defending them.

  • 10:33:49

    JERRYNo. But, I mean, the Republicans complaining about it seems kind of silly. The other thing, I retired 7 1/2 years ago after 39 years with the Wall Street firm. So the regulations are absolutely necessary. And the Republicans' position is akin to our county commission telling our new mayor they're not going to approve his pick for police chief as long as the police department is going to have the right to protect people from crimes and investigate crimes and prosecute people for crimes.

  • 10:34:18

    JERRYThe industry flat-out doesn't want the regulations, and it's not just the things that your speakers mentioned earlier. They want to -- the regulations will concern derivatives, all kinds of other things that went wrong. And here in Florida, we had thousands or hundreds of mortgage brokers who are ex-felons, and they had no trouble being allowed to be mortgage brokers.

  • 10:34:42

    REHMAll right. Thanks for your call. First on the Bush...

  • 10:34:45


  • 10:34:46

    REHM...appointments, Bruce.

  • 10:34:47

    FEINNo, I was not defending -- never defended -- a recess appointment by President George Bush. I don't believe the courts have actually ever rendered a definitive decision on the issue. But there was an 11th Circuit decision that left it to the president. Is that correct? Well, Prof. Tribe filed an amicus brief there, so he should explain exactly the argument and the result.

  • 10:35:07

    TRIBEWell, the 11th Circuit did decide that intra-session appointments -- that is, recess appointments during a session -- are perfectly permissible. And the particular circumstances of that case led me to question whether that intra-session appointment was permissible because the president's powers to run the executive branch weren't being held hostage in the way they are here.

  • 10:35:34

    TRIBEI mean, certainly if the Republicans believe on the merits that some of the powers that are given to the director ought to be given to a board, or that there ought to be more accountability, they can amend the Dodd-Frank act. They're trying to amend it through the backdoor by sort of using the filibuster in a negative way to prevent the agency that was voted into law from performing its functions.

  • 10:35:58

    REHMAnd, Mark, what about Jerry's point that, in fact, the banks just don't want this authority to be placed in anyone's hands?

  • 10:36:10

    CALABRIAThere's a lot of misperceptions. Jerry brought up the question of derivatives. Derivatives aren't under the jurisdiction of the Consumer Finance Protection agency. In fact, none of Wall Street is under the jurisdiction of the Consumer Financial Protection...

  • 10:36:19

    REHMSomebody ought to be.

  • 10:36:20

    CALABRIAWell, the Securities and Exchange Commission is, and the Commodity Futures Trading Commission oversees derivatives, and those agencies are up. You can question the performance of them -- I do it all the time -- but these powers are in place. So let's be clear. The sort of, you know, the system about protecting Wall Street is a red herring. Wall Street is not what's at issue here. Payday lenders, check cashers, that's what's at issue here.

  • 10:36:40

    PLUNKETTWell, Mark's splitting hairs. I mean, Americans understand Wall Street to be the large national banks that are often performing many functions, including offering them banking services and dealing with Wall Street. So the large national banks have opposed, for the most part, the creation of the Consumer Financial Protection Bureau since the very beginning.

  • 10:37:07

    CALABRIAThat, of course, does not change the fact that Wall Street activities are there. They are not under this agency or the SEC, and of course that's a different question.

  • 10:37:16

    REHMAll right. We'll take a short break here. And when we come back, more of your calls, your comments on the Consumer Financial Protection Bureau, the recess appointment of a new chief by President Obama and everything else involved.

  • 10:40:04

    REHMI got so many emails and Twitters and Facebook posting. Here's the tweet from Elizabeth, who says, "I'm feeling revulsion for Congress. So disappointed on the gavel in sham." Jen says she is curious to know why Republicans don't want consumers to have protection. History shows they need it. And here's an email from Charles, who says, "Just to add some perspective, the whole conversation is completely inane.

  • 10:40:45

    REHM"We're talking about the ability refusal of our elected officials to not do their jobs. They're elected to pass laws, run government. To say that Congress doesn't have to vote on appointments, the president doesn't have to make appointments because of loopholes in the laws is crazy. It's exactly what they're there to do. Dodd-Frank passed. Not following through with an appointment is like a little kid refusing to eat their peas. Shut up and eat," he says. Travis Plunkett.

  • 10:41:27

    PLUNKETTWell, I do think that this is unprecedented in my experience. I -- at least, publicly -- I understand that, privately, lots of concerns are raised. But publicly, I have never seen a justification for not allowing a vote on a nominee to be. We want to undo the law, revise the law because we think the Consumer Financial Protection Bureau is too strong. In other words, we want a do-over. Congress acted, we don't like the results. We're a minority, but we want a do-over. I've never seen that, and I don't know that that has occurred in 20 years.

  • 10:42:02


  • 10:42:03

    CALABRIAFirst, to someone who spent a number of years as staff on Senate Banking Committee, working on nominations, I saw on a number of occasions where nominations were held up because some senator wanted some policy change by an agency or, even worse, they wanted some project in their state approved. So it's pretty much the norm for nominations to be held up and used as leverage.

  • 10:42:22

    CALABRIAAnd, I mean, I saw Sen. Dodd do it on several occasions. But as a -- I think it's important matter to keep is the majority of nominations that have been put (unintelligible) actually do get approved. So the -- I think the impression that somehow no business gets done is simply false.

  • 10:42:35

    REHMBruce Fein.

  • 10:42:36

    FEINWell, I think that the remedy that the caller identified is the next elections, and that's one of the reasons why members should be a little bit worried if their popularity is 9 percent precisely because the shenanigans going on. If a president refused to make nominations, then that's to be decided the next election whether that's worthy of re-election.

  • 10:42:55

    REHMAnd we should point out here that you are working as an advisor to Ron Paul.

  • 10:42:59

    FEINRight, to Ron Paul's 2012 campaign.

  • 10:43:02

    REHMOK. And, Prof. Tribe, how do you see it?

  • 10:43:06

    TRIBEWell, it seems to me that the point about using the filibuster to get a do-over is really a very fundamental one and shouldn't be overlooked. It's true that there's a lot of dysfunction going on in Washington. But to translate the paralysis in Congress into a paralysis of the whole body politic and rendering regulatory agencies headless and therefore impotent, that's really something new. I mean, it's true, as has been pointed out, that appointments matters are used as leverage. That's nothing new. Politics isn't beanbag.

  • 10:43:45

    TRIBEBut using them as leverage is quite different from withholding the appointment of someone whom the statute says has to be appointed if the agency is to exercise most of its powers. And it's very fundamental that for an agency to be paralyzed over a period of time until, as Bruce suggests, the next election isn't the way the government is supposed to work. The National Labor Relations Board needs to have a quorum in order to promulgate any rules at all.

  • 10:44:14

    TRIBEAnd when a vacancy in that agency occurred during what is obviously an extended recess -- and I don't hear anybody really defending the idea that these gavel in, gavel out sessions that can do no business prevent it from being an extended recess. I mean, until somebody is appointed to the NLRB, it simply has no power. And when the Republicans pledged to deny an up or down vote to any NLRB appointee, they're basically saying, we don't have the votes to repeal the Wagner Act, which that agency administers.

  • 10:44:51

    TRIBEWe don't have the votes to amend Dodd-Frank, but, you know, we're going to affect through the back door that policy change. That's quite new. Now, Bruce may be right that it's really a political battle between the branches and that the courts will sit it out under the so-called political question doctrine. That might be a wise course. But it seems to me that to accuse the incumbent president of violating the Constitution by trying to undo the paralysis through invoking an explicit constitutional clause for recess appointments is a bit much.

  • 10:45:27

    REHMAll right. To Kentwood, Mich., good morning, Dick.

  • 10:45:32

    DICKOh, good morning, Diane. Appreciate your show.

  • 10:45:35

    REHMThank you.

  • 10:45:35

    DICKI listen in most every day, and you have some very, very good diversity of guests and subjects.

  • 10:45:45

    REHMThank you.

  • 10:45:46

    DICKAnyhow, in regard to today, I think the American public is not stupid. I think they're pretty intelligent in general. And I don't think you can convince the general public that by bringing one person into this chamber, banging the gavel, saying this thing is in session and then -- for three days and then leaving in about five minutes, I don't think you can convince the American public that this Congress is in session. And I don't think the Republicans are doing themselves any good in trying to convince the public that they are in session.

  • 10:46:28

    REHMThat's an interesting point. Does this hurt Democrats, or does it hurt Republicans?

  • 10:46:36

    FEINWell, I think it hurts incumbents, both Democrats and Republicans, 'cause you can look at it a different way as well. It'd be hard to argue if you're just reading the language of the Constitution. This vacancy occurred during a recess. Moreover, most people get frustrated when it's a minority that are purposely jigging the rules to frustrate the majority. But here, the majority is acquiescent in the minority control by permitting the filibuster to be utilized this way.

  • 10:47:04

    FEINEarlier on, when I was advising with regard to judicial nominations, I thought it didn't make any sense for judicial nomination to be subject to filibuster. They should have up or down votes and that Senate should change its rule, at least for judicial nominations, to prohibit a filibuster. But that wasn't done. There was a Gang of 14. They didn't want to get rid of that.

  • 10:47:23

    FEINBut this is not a situation where, in some sense, President Obama and the Democrats don't have the key to their own jail. They can unlock it. Simply change the filibuster rule, there would be an up or down vote, and he would be in there legitimately.

  • 10:47:34

    REHMProf. Tribe.

  • 10:47:36

    TRIBEWell, it's amusing to hear someone say simply change the filibuster rule. I mean, if it could be done with the wave of a wand, it would've been done a while ago because people on both sides of the aisle realized that there are serious problems with the rule. But nobody has figured out a consensus way of changing it. But I just wanted to make another point about Dick's call from Kentwood when he says the public isn't stupid. I agree. And I think the public can count, knows elementary arithmetic.

  • 10:48:05

    TRIBEIf you look at the sessions, the so-called sessions that the Senate has held during its recess, they add up to something like 12 minutes over the entire period of the recess, 12 minutes of time during which no business can be conducted. I mean, nobody can look at that and say that the Senate isn't in recess, and that's really the key point.

  • 10:48:29


  • 10:48:30

    CALABRIADiane, if I could add very quickly. I mean, the Senate has done business. For instance, the day before the nomination on Jan. 3, the Senate returned the confirmation of Richard Cordray to the White House. The payroll tax extension was passed on Dec. 23 during one of these sessions. So do we believe that the payroll tax extension was not actually passed and signed by the president? There was an earlier point about Republicans being against consumer protection. That's actually not the case.

  • 10:48:54

    CALABRIAAs with many things in life, the devil is in the details. So the disagreement is actually whether this agency will protect and improve consumers. I -- as a consumer, I don't feel like I'm going to be protected from this agency. In fact, I feel threatened by the agency as a consumer.

  • 10:49:06


  • 10:49:08

    PLUNKETTWell, it's just hard to believe that at this point, anybody -- talking about the public not being stupid, at this point, I don't think the public would buy the notion that long-term efforts to stop this agency from being created in the first place, to allow it to have, you know, meaningful power to protect consumers and then to have a director enact with all of its authority, I don't think anybody would believe that this isn't yet the latest tactic in a long-term effort to stop effective consumer protection from taking place at the federal level.

  • 10:49:39

    REHMBut what about Mark's point that some actions have been taken by the Senate over this period?

  • 10:49:49

    TRIBEWell, on Dec. 23, it is true, Diane, that Harry Reid asked unanimous consent that the House-passed payroll tax holiday extension be considered and read three times and be enacted. So I overstated. It's only 10 of the 11 so-called sessions that nothing was done or could be done. But that certainly doesn't make a difference to the overall picture.

  • 10:50:14


  • 10:50:14

    FEINBut it shows that the Senate could reconvene very quickly and vote on the name...

  • 10:50:17

    REHMCould, if it had wanted to.

  • 10:50:19

    FEINIf it had -- that goes as self-inflicted wound. Now, Prof. Tribe says, well, it's hard to get rid of the filibuster. Well, there are lots of things that are hard to do. The fact is both the Democrats and the Republicans want it, that the majority party is willing to acquiesce to this kind of veto of the minority through the filibuster. And that's something that is a problem that's totally independent of saying whether this was a recess appointment.

  • 10:50:41


  • 10:50:42

    CALABRIAYou know, we could probably have an hour just on filibuster, but let me quickly make a point as someone who spent years working in the Senate. There is nothing in the Constitution against supermajority rules. If the Senate wanted to say you need 60 votes for any nomination, there is nothing unconstitutional about that. In fact, the majority of nominations that passed the Senate passed by unanimous consent. That is 100 votes. So there's nothing special about 51, 52, 53.

  • 10:51:04

    REHMAll right.

  • 10:51:05

    FEINWell, I don't know about that. The Constitution does specify what threshold as requirement is necessary for action. In treaties, it says two-thirds. Overriding vetoes, it says two-thirds.

  • 10:51:15


  • 10:51:15

    FEINIt says nominations, simple majority. And what's being done is, by rule, it's raising that constitutional floor to a higher level.

  • 10:51:21

    REHMAll right.

  • 10:51:22

    FEINNow, whether you could get a court to decide it's unconstitutional is another matter.

  • 10:51:25


  • 10:51:25

    FEINBut could they say only unanimous, you have to have 100 percent in order to get confirmed as a Supreme Court justice? I don't think so.

  • 10:51:30

    REHMI think Prof. Tribe wants to comment on that.

  • 10:51:34

    TRIBEYeah. Here again, I find myself in agreement with Bruce. The fact that the Senate -- the Constitution does not explicitly say that the Senate cannot impose a supermajority requirement doesn't prevent that from being a really implausible reading of the Constitution. The background norm throughout the Constitution is that simple majorities rule, unless there is a supermajority explicitly stated. So, although I agree that it's not likely the court would opine on this, my own view is that the whole use of the filibuster is of dubious constitutionality.

  • 10:52:08

    REHMAll right. Here's an email from Anna, who says, "It's pretty disingenuous for Republicans to complain about recess appointments when President Bush made abundant use of recess appointments to circumvent opposition to his top -- his choice for top government jobs. I didn't hear Republicans complaining then about the constitutionality of such moves. This is just more obstructionist on the part of Republicans who are opposed to president Obama getting anything done in office." Bruce Fein.

  • 10:52:47

    FEINListen, it's the norm, unfortunately, in Washington that abuse of both Democrats and Republicans on constitutional issues are like what Justice Roberts called a restricted railroad ticket, good for this day and train only. They jump around based upon whether they're advancing their party interest or not. And you can -- I could provide you a list of 20 constitutional issues that, depending upon you're Republican or Democrat, change from day to day who's occupying the White House.

  • 10:53:11

    REHMAnd you're listening to "The Diane Rehm Show." Travis Plunkett, is all of this debate about constitutionality, about everything surrounding this appointment, is it going to hurt the agency? Is Mr. Cordray going to be able to move forward?

  • 10:53:34

    PLUNKETTWell, I'll tell you what, Cordray said he -- the day after he was appointed, he said, no, we've got a lot of activity in the pipeline. We've been waiting for this day. We're starting supervision of non-banks. We're looking at a number of enforcement actions. We've started providing information -- better information to consumers about their mortgage loans and their credit card loans.

  • 10:53:57

    PLUNKETTAnd their student loans were ready to go to the next step and look at subsidence protections. He's saying that his job is to protect consumers. So I take him at his word.

  • 10:54:06

    REHMTravis, here's another email from Michael, who says, "What can the new board accomplish for the taxpayer that couldn't have been done by existing regulatory agencies and law? How did the additional cost to taxpayers compare to the benefits to taxpayers?

  • 10:54:29

    PLUNKETTWell, good question. I mean, we should always be doing a cost-benefit analysis. Two things: one, because they were split, because there were so many federal agencies with authority over consumer protection, they often fought each other and miss some huge consumer protection problems. Having all that authority in one place -- let's be clear, this isn't a new layer of bureaucracy.

  • 10:54:50

    PLUNKETTWe took authority, we took power away from other agencies, and we put it in the new agency. So first, having that new authority in one place, if they help consumers, they get the credit. If they don't, they get the blame and the accountability. That's important. Second, this agency has something that many of those other federal regulators like the Federal Reserve and the Office of the Comptroller of the Currency didn't have. They seem to have the will to protect consumers. They take the law seriously.

  • 10:55:19

    PLUNKETTAnd the law, by the way, has some new authority. It gives them authority to look at deceptive, unfair and abusive practices. And as I mentioned, it gives them the authority to look at non-bank financial companies.

  • 10:55:29

    REHMAnd you're saying no existing agency could have done the same things?

  • 10:55:35

    PLUNKETTWell, you have the new authority in with the consolidated authority. With the accountability, with the mission, with the coverage of all the players in the market, that's a big change.

  • 10:55:46

    REHMBruce, is the agency going to be able to carry out its function?

  • 10:55:52

    FEINWell, it's very, in my judgment, dubious. I think that a court might well find, if there's an initial challenge once they exercise the powers over new institutions, that there could be irreparable harm, 'cause it'd be difficult to undo the supervision unlike a rule. There'd be a burden imposed, and you could get a preliminary injunction until there's a final resolution of this. And maybe the November elections will what finally resolve it one way or the other.

  • 10:56:18

    REHMProf. Tribe, I'll give you the last word. Will the agency be able to function?

  • 10:56:26

    TRIBEI think it has a mandate and it has the will. The fact that litigation overshadows it doesn't distinguish it from much else that goes on in this country. We are a litigious country, and I think that it's extremely unlikely that the agency will be frozen in its tracks by a court that hasn't given the thing a full complete hearing. So I think the agency will be able to work well.

  • 10:56:48

    REHMLaurence Tribe of Harvard University, Bruce Fein, Mark Calabria, Travis Plunkett, thank you all so much.

  • 10:56:58

    TRIBEThank you.

  • 10:56:59

    PLUNKETTThank you.

  • 10:56:59

    REHMThanks for listening. I'm Diane Rehm.

  • 10:57:02

    ANNOUNCER"The Diane Rehm Show" is produced by Sandra Pinkard, Nancy Robertson, Denise Couture, Monique Nazareth, Nikki Jecks, Susan Nabors and Lisa Dunn, and the engineer is Tobey Schreiner. A.C. Valdez answers the phones. Visit for audio archives, transcripts, podcasts and CD sales. Call 202-885-1200 for more information. Our email address is, and we're on Facebook and Twitter. This program comes to you from American University in Washington. This is NPR.

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