Senate Dems Urge Republicans To Side With Main Street, Confirm Consumer Bureau Chief

By Andrea Salazar

Senate Banking Committee Democrats called on Republicans Wednesday to vote to confirm Richard Cordray —  the president’s nomination for director of the Consumer Financial Protection Bureau.

President Obama nominated Cordray, a former Ohio attorney general, to head the bureau in July. However, Senate Republicans have promised to block his confirmation until the agency’s powers are limited.

But at the Wednesday news conference in support of Cordray’s nomination, Sen. Robert Menendez (D-N.J.) argued that Cordray’s confirmation is necessary to keep community banks and credit unions competitive.

“You put them at a competitive disadvantage by not having a director, because payday lenders, check cashing places, pawn brokers, the types of loans going to military families, that all goes largely unregulated without a director at the Consumer Financial Protection Bureau,” Menendez said.

The Consumer Financial Protection Bureau is a federal agency that came out of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Its mission, as stated on the bureau’s website is to “make markets for consumer financial products and services work for Americans — whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.”

Sen. Jack Reed (D-R.I.) said that not confirming a director is “sort of like saying, ‘sorry, you can’t have a commissioner of the FDA until you repeal all the food, drug and safety laws in the country.’ Doesn’t make sense.”

The Senate is expected to vote on Cordray’s nomination Thursday.

“Voting for Richard Cordray means you’re on the side of people on Main Street. Voting against him, means you’re on the side of Wall Street,” Menendez said.

Driven By Gulf Spill, Menendez Continues Fight Against Big Oil

After repeated failed attempts to force the Senate to vote on a bill that would hold oil companies more liable for damages caused by spills, Sen. Bob Menendez (D-N.J.) today announced a bill aimed at recouping more tax dollars from such corporations.

The Close Big Oil Tax Loopholes Act, which Menendez is co-sponsoring with Sens. Bill Nelson (D-Fla.) and Jeff Merkley (D-Ore.), would rescind a number of tax breaks that large oil companies currently receive; breaks Menendez believes are unfair.

“The flow of revenues to oil companies is like the gusher at the bottom of the Gulf of Mexico; heavy and constant,” he said in a statement Monday. “There is no reason for these corporations to shortchange the American taxpayer.”

Yet, while Menendez says the bill would generate roughly $20 billion over the next decade, the intent of the legislation appears to simply be to punish the oil industry for profiting. Of the bill’s eight provisions, only one -- a proposal to place an excise tax on oil and gas produced on the Outer Continental Shelf (OCS) -- seems rooted in consumer protection.

Menendez, however, said the bill is necessary to prevent oil companies from continuing to gauge their customers.

“They certainly aren’t using the extra money they get from exploiting these loopholes to help bring down the price of gas for our families.”

Financial investment firms compared to "spoiled teenagers"

As far as Senator Chris Dodd (D-Conn.), Chairman of the Senate Banking, Housing and Urban Affairs Committee, is concerned, there must be a “heightened sense of urgency” about the enactment of the Emergency Economic Stabilization Act. At a full committee hearing on the turmoil in the United States credit markets, the committee heard from Sheila Bair, chairwoman of the Federal Deposit Insurance Corporation; Neel Kashkari, interim assistant secretary for financial stability and assistant secretary for international affairs at the Treasury Department; Brian Montgomery, federal housing commissioner and assistant Housing and Urban Development secretary; Elizabeth Duke, member of the Federal Reserve Board of Governors; and James Lockhart III, director of the Federal Housing Finance Agency.

The opening statements included Senator Charles Schumer’s (D-N.Y.) comparison of the financial investment firms in question to “spoiled teenagers” who threw a house party while their parents were out of town. Schumer said the financial crisis was “not unforeseeable” and that the Treasury must issue guidelines for future banking endeavors now that taxpayer money is involved. Senator Bob Menendez (D-N.J.) believes that if 9800 Wall Street jobs were lost everyday, like they were lost for millions of Americans, the financial problem would have been solved long ago. He then stated that the “funds are not a gift” from taxpayers to banks and that must be made clear through oversight and compliance.

In her testimony, Chairwoman Sheila Bair advised the necessity to recapitalize banks in order to reverse the “confidence problem” happening in America. She said this recapitalization would be similar to that of European banks and would help in the area of liquidity. She also advised that to help homeowners, the FDIC would work with the Senate Banking Committee and Treasury Department to prevent future foreclosures and create sustainable mortgages. Neel Kashkari said that to help financial institutions, the Treasury Department had created seven policy programs including an equity purchase program, a homeownership preservation program, and an executive compensation program. Kashkari believes that the Treasury has “accomplished a great deal in a short period of time,” but stated that it may not be until the end of the year before the $250 billion is allocated to chosen banks.