US President Barack Obama speaks about the economy at Shaker Heights High School.
A defiant President Barack Obama said he will bypass Congress and install Richard Cordray as head of the country’s new consumer financial watchdog, escalating an election-year fight with Republicans, who questioned the legality of the move.
The recess appointment, which Obama announced in a campaign-style rally at a high school gym in a Cleveland suburb, is being cheered by Democrats and liberal advocacy groups who want tougher oversight of Wall Street and other financial players.
In a separate statement on Wednesday, Obama said he would also use recess appointments to fill three vacant seats on the National Labor Relations Board.
Obama’s appointment of Cordray and the NLRB nominees is part of a broader White House strategy to portray Obama as an activist president confronted with a «do nothing» Congress that has stymied his economic agenda.
Obama used recess appointments to install Sharon Block, Terence Flynn and Richard Griffin at the NLRB after the Senate failed to move on them, which left the five-member board without enough representation to fully conduct its business in 2012.
Last month, Republicans blocked a vote on whether to confirm Cordray.
«We know what would happen if Republicans in Congress were allowed to keep holding Richard’s nomination hostage. More of our loved ones could be tricked into making bad financial decisions,» Obama told a cheering crowd.
Obama’s decision to appoint Cordray, a former Ohio attorney general who frequently took on big banks, without a Senate vote, is likely to face a legal challenge because Republicans contend the Senate is still technically in session.
«This is an extraordinary and entirely unprecedented power grab by President Obama,» House Speaker John Boehner said in a statement. «I expect the courts will find the appointment to be illegitimate.»
The Consumer Financial Protection Bureau (CFPB) was created by the 2010 Dodd-Frank financial oversight law, enacted in response to the 2007-2009 financial crisis, to police the market for consumer products such as credit cards and mortgages.
Democrats have heralded the bureau, which opened its doors in July, as a way to protect consumers from abusive lending practices like the type of home loans that were made in the years leading into the financial crisis.
Republicans have charged the agency is a virtually unchecked government body that will hurt lending and put small banks out of business.
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