DOJ Says OK to Cordray, CFPB to Begin Mortgage Exams in February

Consumer Financial Protection Bureau Chief Richard Cordray said during a press conference that examination of nonbanks will begin in February, according to reports released today. The announcement comes a day after the agency released examination procedures for mortgage originators, including reverse mortgage specifics.

Despite speculation surrounding Cordray’s appointment, the Department of Justice today announced its determination that the recess appointment of Richard Cordray to lead the Consumer Financial Protection bureau was within President Obama’s legal power. The appointment, made by the president in the midst of a series of short pro forma sessions held by Congress, faced republican opposition under the claim that the Senate was in session.

In a letter sent by 98 members of Congress immediately following the appointment of Richard Cordray to lead the Consumer Financial Protection Bureau, leaders expressed their strong objection to the action.

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“These appointments were made a a time in which the Senate was demonstrably not in recess,” the letter states. “This unprecedented and blatant attempt to override legislative power effectively erases the advice and consent of the Senate from the appointments clause and imperils the legislative checks on executive power that the Founders thought necessary to prevent the emergence of tyranny.”

The letter target’s Cordray’s appointment as “especially egregious.” His appointment came on the same day that the president appointed three leaders to the National Labor Relations Board.

“Mr. Cordray’s appointment is clearly an attempt to override the judgement of the Senate and circumvent its constitutional role,” the congress members write.

The decision, released in a memo by Assistant Attorney General Virginia Seitz, states that “the convening of periodic pro forma sessions in which no business is to be conducted does not have the legal effect of interrupting an intrasession recess otherwise long enough to qualify as a “Recess of the Senate” under the Recess Appointments Clause.”

Cordray is scheduled to testify before a House subcommittee on January 24.

Written by Elizabeth Ecker

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