Financial Reform Watch : Financial Services News & Information : Blank Rome Government Relations Lobbying Firm : Government Relations, Corporate Governance : Financial Reform Watch Law Blog

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On Thursday, all 10 Republican members of the Senate Banking, Housing and Urban Affairs Committee—led by Sen. Bob Corker (R-TN)—wrote a letter to committee chairman Tim Johnson (D-SD) urging him to “hold hearings and a mark-up as soon as reasonably possible on legislation to establish an accountable governance structure for the Bureau of Consumer Financial Protection.”

This latest action follows a May 2 letter signed by 44 Senate Republicans to President Obama that threatened to block any CFPB director nominee—regardless of party affiliation—unless appropriate accountability mechanisms for the CFPB are addressed by Congress. In both instances, Senate Republicans are calling for the adoption of three specific CFPB reforms, including:

1. altering the CFPB’s leadership structure from that of a single director to a board of directors, similar to the Federal Deposit Insurance Corporation (FDIC), Federal Reserve Board, or Securities and Exchange Commission (SEC);
2. subjecting the CFPB to the congressional appropriations process; and
3. providing prudential bank regulators with stronger tools to prevent CFPB regulations that may impact the safety-and-soundness of banks.

The tactic is clearly an attempt to force the hands of President Obama and Senate Democrats by using the confirmation process as a leverage point. Unless President Obama chooses to circumvent the Senate confirmation process through a recess appointment—a move deemed by many as politically controversial—he and Chairman Johnson will be forced to recognize many of the Senate GOP’s demands for CFPB reform. The House Financial Services Committee has already passed three bills that nearly mirror the Senate proposals.

Also in the House, senior House Financial Services Committee member Carolyn Maloney (D-NY) has circulated a “Dear Colleague” letter requesting that House members sign a letter to President Obama urging him to appoint Elizabeth Warren to the CFPB director position during one of the upcoming congressional recesses.

“Since Republican senators have said that no one is acceptable unless the law is weakened, we would urge you to nominate Professor Warren as the CFPB’s first director anyway,” says Maloney’s letter to President Obama.