White House spokesman Jay Carney doubled down Thursday on President Barack Obama’s controversial claim that Richard Cordray has legal standing to use the full powers of the Consumer Financial Protection Bureau.
“The president is saying that in recess appointing Richard Cordray, Richard Cordray has absolutely the powers he needs to fulfill his responsibilities in that job,” Carney told The Daily Caller.
Obama’s claim is controversial for at least two reasons.
Firstly, because Obama is asserting that he can recess appoint officials whenever legislators are not working on Capitol Hill.
Secondly, Obama is asserting that his recess appointment of Cordray grants him the powers that a 2010 law reserves for someone who is actually confirmed by the Senate.
The controversy began on Jan. 4 when Obama’s staff said that the Senate’s ”pro forma” sessions — where few senators are in town, and very little Senate business is conducted — were legally equivalent to a formal recess.
Obama used this “pro forma” session to justify a recess appointment of Cordray as head of the new Consumer Protection Financial Bureau. Shortly after, he also installed three people on the National Labor Relations Board. (RELATED: Full coverage of the Consumer Protection Financial Bureau)
Administration officials touted a 23-page Justice Department legal brief Thursday justifying Obama’s controversial claim about the Senate’s recess duration.
The Constitution limits the president’s powers by requiring him to win Senate approval for senior appointees. However, it allows the president to quickly appoint people when the Senate is in recess.
Two days after the appointment, Obama escalated the controversy by arguing that his installation of Cordray is legally the same as formal Senate approval. (RELATED: White House taunts GOP opponents over recess appointments)
He made that claim when he said that Cordray can exercise the legal authorities granted only to a director confirmed by the Senate.
Section 1066 of the 2010 law that created the bureau says that many of the bureau’s new powers are held by the Secretary of the Treasury until the director of the bureau is confirmed by the Senate. Those extra powers include the authority to write regulations for non-bank firms, such as payday lenders. (RELATED: Cordray’s power stymied by 2010 law that created his new agency)
On Thursday Carney claimed Cordray has those extra powers, but did not explain why.
Notably, Carney did not claim that the president’s recess appointment is legally the same as a Senate approval.
Instead, he left room for White House lawyers to argue that other provisions in the 2010 law allow Cordray to exercise full authority, perhaps via an informal transfer of power from the Treasury Secretary to Cordray.
Cordray “is in place making sure that Americans are protected from payday lenders and non-bank institutions, student loan brokers and others from the abuse they were not protected against prior to him being installed by the president and being recess appointed by the president,” Carney said.
GOP legislators and activists say Cordray has not been confirmed or even properly recess-appointed, and so cannot have the extra powers described in Section 1066.
“The law is clear that he can’t issue regulations without a head of it being confirmed by the Senate,” Iowa Republican Sen. Chuck Grassley told TheDC.
Cordray’s lack of authority will ensure that his agency’s “rules and regulations will be a nullity” once they’re reviewed by judges, Grassley said.