Elizabeth Warren upset the GOP last week when she claimed success after the Senate confirmed Richard Cordray as director of the Consumer Financial Protection Bureau (CFPB), a consumer watchdog agency conceived by Warren. The CFPB aims to protect Americans from negligent practices by large financial corporations, like banks, debt collectors, and mortgage companies, by enforcing regulations and closely watching the financial markets for potential risks for consumers.

The GOP has been trying to dismantle the agency since the CFPB was started in 2011. The Federal Reserve funds the CFPB with 12 percent of its budget, which means Congress has little say in the CFPB’s use of its budget. This has troubled the GOP for some time, and the Party has been blocking the CFPB from nominating a director for years. Now, Cordray’s appointment as director of the CFPB has sent those in the Republican party into a frenzy, as their original plan to eventually squash the agency has been compromised.

In 2011, President Barack Obama nominated Cordray as director of the CFPB, however, the GOP filibustered the nomination. The president then used a recess appointment to place Cordray in the position six months later. Enraged, the GOP backed the recess appointment up with a suit, which goes before the Supreme Court this fall.

The GOP must now turn to its back-up plan, riding on the Supreme court case against the agency.The GOP’s current plan relies on the Supreme Court ruling Obama’s recess appointment as unconstitutional. The ruling would also undermine the regulatory actions the CFPB took before Cordray ‘s position was confirmed.

However, legal experts weighing in on the outcome of the Supreme Court case say that even if the recess appointment was ruled unconstitutional, it would do little to weaken the CFPB. An unfavorable ruling for the CFPB would be an annoying obstacle for the agency to overcome, but it wouldn’t bring the agency down like the GOP hopes.

If the Supreme Court ruling fails, the GOP has an additional suit against the CFPB. This secondary suit alleges that the agency demanded credit records of at least 5 million Americans to conduct safety surveys on financial products available on the market.

 However, the troublesome obstacles the GOP keeps throwing in front of the CFPB seems to be more of a thorn in the agency’s side than a threat. The GOP claims their efforts to block a director being appointed for the CFPB is about holding the agency accountable, yet, the agency does what it’s supposed to do: regulates large financial corporations to protect consumers.


Krysta Loera is a writer and researcher for Ring of Fire.