The Banking Industry's Worst Nightmare: Obama To Use Special Recess Appointment To Place Head Of The CFPB

Obama Jobs Speech

Photo: AP Photo/Keith Srakocic

The AP is reporting that President Obama plans to appoint Richard Cordray as the head of the newly created Consumer Financial Protection Bureau despite Republican opposition to the nominee.The President will use a recess appointment to make the move, which allows Cordray to take charge of the agency without Senate approval.

Thus far, White House officials are only speaking anonymously on the appointment, ahead of a formal announcement by the President later this afternoon in Ohio. The President is in the key electoral state speaking on his economic agenda.

We’ll have more as additional detail are available. But here’s what could happen if the President makes this move (according to Ben White at Politico). Likely, there would be a lawsuit from the opposition, but while that winds its way through court, Cordray would be able to take over the agency. That could be a PR win for Obama, but Republicans could retaliate by holding up every little nomination or bit of legislation in 2012.

For the last month, while this story has been whispered around Washington, everyone was saying the President would likely NOT spark a Constitutional lawsuit over this issue — partly because it was something he could hold over Republicans’ head for the American people to judge. Apparently that was not the case.

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