CFPB is a federal agency launched on July 21, 2011 by the Dodd-Frank Wall Street Reform and Consumer Protection Act. It is funded through the Federal Reserve (in an amount equal to 10% of the Federal Reserve’s budget), alleviating it from congressional oversight through the ordinary appropriations process.
On Thursday, June 7, 2012 Judicial Watch sued the Consumer Financial Protection Bureau (CFPB) for release of documents requested on January 12 and January 25 relating to Richard Cordray’s appointment as the agency’s director without Senate confirmation. In response to the lawsuit, the agency produced a dozen pages of responsive documents, supplementing a March 30 initial production of 222 pages. The supplemental release (described by the agency as final with respect to this matter) came via emails to Judicial Watch sent at 9:59 p.m. and 10:19 p.m. on Friday, June 8th. The new documents reveal that:
- A Barney Frank staffer named Kate harbored unanswered questions regarding the president’s legal authority to appoint a CFPB director in the manner that he did. The actual questions are redacted from the documents CFPB produced. However, many legal analysts have said that, even assuming the Senate was in recess at the time of the appointment the way the President characterized it, the CFPB did not have a vacancy for purposes of the Constitution’s recess clause because, as a new agency, it had not yet had a director. (CFPB-2012-037, p. 10-11).
- President Obama contracted with a vendor untold funds to hold an event (likely Cordray’s swear-in ceremony) in the CFPB amphitheater on Friday, January 6th. Equipment included six to eight folding tables, making it likely that 30 or more people attended the event, although no pictures have yet to be disclosed. (CFPB-2012-042, p. 4).
The following column by Congressman Spencer Bachus (AL -6) advocates this appointment was inconsistent with the Constitution. Congressman Bachus is Chairman of the House Financial Services Committee. Click here for the column.
Consumer Financial Protection Bureau (CFPB) released on September 28, 2012 an additional 17 pages in full and 8 pages in part pursuant to a Freedom of Information Act (FOIA) lawsuit filed against the agency by Judicial Watch, Inc. on June 7, 2012. The FOIA sought all records surrounding Richard Cordray’s “recess” appointment as director of the new agency, created under the auspices of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Along with its disclosure of 25 pages, CFPB admitted to withholding 880 pages more, citing unexplained confidentiality, privacy, and law enforcement concerns. In support of this decision, the agency wrote:
Pursuant to our agreement, the Consumer Financial Protection Bureau (“Bureau”) has conducted an additional search for records responsive to your client’s Freedom of lnformation
Act requests dated January 12, 2012, and January 25,2012. Attached to this letter, please find an additional 25 pages of records responsive to your requests. Of these records, the Bureau has
determined that 17 pages are releasable in full and that 8 pages are releasable in part pursuant to 5 U.S.C. § 552(b)(5) and/or (b)(6). An additional 880 pages have been withheld in full pursuant to 5 U.S.C. § 552(b)(5), (b)(6), and/or (b)(7).
CFPB has until October 26 to justify its withholdings in court.
“There is a chance…that the appointment would be invalidated by a court.”
Cordray Told Staff His Short Stint “should give to each one of us…a fierce urgency to accomplish the work we are doing together.”
(Washington, DC) –Judicial Watch, the organization that investigates and fights government corruption, announced today that it has obtained documents from the Consumer Financial Protection Bureau (CFPB) that indicate the agency’s director, Richard Cordray, doubted the constitutionality of his own appointment. On January 4, 2012, President Obama announced that he was using a “recess appointment” to install Corday as head of CFPB even though the U.S. Senate was in session and, therefore, retained its constitutionally mandated “advise and consent” role for all presidential appointments. Cordray was then sworn in on January 24, 2012.
Judicial Watch obtained 222 pages of records pursuant to the Freedom of Information Act (FOIA). Some of these documents reveal that Cordray believed that his appointment could be invalidated by a court:
- In his February 6, 2012, “Weekly Message,” to the CFPB staff, Richard Cordray acknowledged that his appointment as the agency’s director without Senate approval was vulnerable to legal challenge: “There is a chance (a minor chance in my view, though everyone is entitled to his or her own opinion) that the appointment would be invalidated by a court.”
- In the same February 6, 2012, message Cordray also stated, “the fact that this appointment is for two years (and in some conceivable circumstances it could be shorter) does matter in one important respect…This time period should give to each one of us, and not only me, a fierce urgency to accomplish the work we are doing together.”
When Barack Obama announced his decision to install Cordray as head of the CFPB, the president called the move a “recess appointment.” However, at the time, Congress was still in session. Article I, Section 5, Clause 4 of the U.S. Constitution provides that: “Neither House, during the Session of Congress, shall, without the Consent of the other, adjourn for more than three days ….” To prevent any recess appointment, the Republican-controlled House refused to consent to Senate adjournment, resulting in the Senate’s coming into session every three days.
“Many have doubts about the constitutionality of Richard Cordray’s appointment. Now we know those doubts are shared by Cordray himself. These astonishing documents provide further evidence that Obama’s recess appointment of Cordray was an abuse of office,” stated Tom Fitton, Judicial Watch president.