So, a flurry of activity signifying nothing on the Elizabeth Warren/CFPB front. Fox News thought they heard that she would get the interim appointment. Then they retracted it. White House spokesman Bill Burton would only say that she’s “in the mix” for the job. Enough plugged-in reporters have speculated that she could get an interim appointment to manage the agency through Treasury, or get the nomination, that clearly Burton is right. Or, nothing could happen. We don’t know and it’s getting ponderous reporting the scraps of information out there.
What’s more fascinating is the fact that Chris Dodd, whose name sits at the head of the Dodd-Frank financial reform bill, doesn’t seem to know the intricacies of the law that bears his name:
News reports yesterday generated speculation that the Obama administration will offer Elizabeth Warren a so-called “interim appointment” to head the Consumer Financial Protection Bureau. The authority for the Treasury Department to grant an interim appointment — distinct from a “recess appointment” — comes from the financial reform law itself.
In dismissing the rumor last night, though, Senate Banking Committee Chair Chris Dodd — who authored the law — claimed he’d never heard of the interim appointment power.
“I don’t know what it is. I never heard of it before,” said a flabbergasted Dodd to TPMDC. “It’s kind of unique isn’t it?”
That’s kind of absurd, is what it is. The law very clearly gives authority to the Treasury Department to set up the Consumer Financial Protection Agency. The law states it pretty clearly (search for “Subtitle F–Transfer of Functions and Personnel; Transitional Provisions”). So long as Treasury is running the CFPB, the Secretary of the Treasury can run the agency. And, he can delegate to someone with interim authority over the agency. It would have been simple for Dodd to move to start out the CFPB inside the Federal Reserve, and we wouldn’t have this issue.
The dirty secret is that drafters write these laws to conform them to the necessary legalese – the Senators outline the broad points. So it’s not unusual for Dodd not to know what’s in his bill. But the consumer protection piece was pretty fundamental, and if it starts at Treasury, it stands to reason that they can have whoever they want to run things on an interim basis, unless it gets written into the law that the interim director needs Senate confirmation. This is just inattentiveness to the legislative process on the part of Dodd.
Again, my ideal preference would be for an interim appointment and a nomination simultaneously, and to have the nomination battle in the next few months. The public supports the financial bill more than anything Congress has recently done, and this strong signal of appointing a fighter for the middle class is good politics. Making sure she can actually do the job is good policy, and the combination appointment/nomination serves that goal in two ways. One, Warren can actually start regulating immediately. Two, it defuses the normal technique for Senate Republicans, to just delay confirmation forever. Because delay means nothing if Warren is already on the job. [Two updates after the jump.]
UPDATE: Tim Fernholz mentioned that Eric Stein is currently heading up CFPB’s transition team. Stein is the Deputy Assistant Secretary for Consumer Protection, and a former senior Vice President with the Center for Responsible Lending.
UPDATE II: Wow, Dodd’s just outright lying now.
Outgoing Senator Chris Dodd (D-Conn.) warned Tuesday that an interim appointment of Elizabeth Warren to head the Consumer Financial Protection Bureau “jeopardizes the existence” of the nascent agency.
“This is a big job, an important job, and it needs to be — you’ve got to build the support for that institutionally or the next Congress – and none of us know what the outcome’s going to be politically — you could gut this before it even gets off the ground. If you don’t have someone running it early on, it jeopardizes the existence of the consumer protection bureau,” he said. Asked how Congress would gut it, he said: “Money. Take away the money. That’s how you always do it.”
The Consumer Financial Protection Bureau has independent funding. To gut it you’d have to gut the Federal Reserve. Dodd repeatedly stressed the independent funding of the CFPB during the Dodd-Frank debate. He claims that “They can change the funding source and kill it… That can change with an amendment” is no different than basically anything in the law today. The GOP could change the law forcing every American to tithe half their salaries to Goldman Sachs with an amendment. Who cares? Defunding is obviously a concern for everything, but I fail to understand the logic of not appointing the right person for a job due to that threat. It’s like saying “don’t poke the bear.” The bear’s awake.