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Obama's Financial Nominees Send Mixed Signals

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Obama's Financial Nominees Send Mixed Signals

CEI Scholar Says SEC Choice Has "Admirable Record" But CFPB's Cordray Should Be Rejected

WASHINGTON, D.C., Jan. 24, 2013—Today, President Obama nominated two ex-prosecutors for key financial posts. But John Berlau, senior fellow for finance and access to capital at the Competitive Enterprise Institute, says the nomination of Mary Jo White to head the Securities and Exchange Commission and the re-nomination of Richard Cordray to head the Consumer Financial Protection Bureau "are night and day in terms of serving the interests of entrepreneurs, investors, and consumers."

Berlau says White established an admirable record as a U.S. attorney when she served for the Southern District of New York from 1993-2002. But he blasts Cordray's tenure at the CFPB and the unconstitutionality of his current "recess" appointment, as well as the unaccountable structure of the CFPB.

"Dodd-Frank set up the CFPB so it would not be accountable to Congress," Berlau writes on CEI’s blog, OpenMarket. “And actions by Cordray during his year-long tenure at the CFPB have confirmed fears about accountability."

Berlau says Cordray allowed individual CFPB examiners to define what an "abusive" financial product is, "adding to the uncertainty that keeps banks and credit unions from lending." Under Cordray, the CFPB also has created regulatory excess. Its proposed “mortgage simplification" rules run more than 1,000 pages.

"There can be no transparency and accountability in the financial system without transparency and accountability in the bureaucracies that control it,” Berlau writes. “The appointment of White—though she will no doubt take many positions conservatives and libertarians object to—may result in an SEC that is transparent and somewhat accountable. Cordray's appointment—based on his record and the CFPB's unaccountable structure—will do neither. His nomination should be rejected."

► Read Berlau's OpenMarket post on White and Cordray's nominations