Yesterday's Senate confirmation of Richard Cordray as the undisputed head of the Consumer Financial Protection Bureau (CFPB) not only solidifies his status, but that of the bureau itself and the actions it has taken over the past two years.

Cordray's confirmation, on a 66-34 vote, was the first to come out of a deal to end filibusters over some of President Obama's key appointments. Cordray was originally nominated for the post two years ago, and had been leading the agency through a recess appointment, but Republicans had challenged the legitimacy of that appointment and were contesting it through the courts.

Previous work could have been thrown out

Had Republicans succeeded in getting Cordray's recess appointment thrown out, all the actions the agency has taken over the past two years would be declared invalid. That includes a number of new rules affecting mortgage lenders due to take effect next year, such as new lending disclosures to be required under the Truth in Lending Act and Real Estate Settlement Procedures Act (RESPA) as well as new rules for mortgage brokers that some fear will make them less competitive.

Now, those rules are certain to go forward. Cordray's appointment also means that anti-kickback and other RESPA-based investigations will continue, and that two RESPA settlements the agency reached with certain lenders and home builders, totaling $15.4 million in penalties, will stay in place.

In addition, having Cordray as director for the next five years - the length of his appointment - means the agency can now move ahead with other items on its agenda.

Senate Republicans had been blocking Cordray's appointment in order to force changes in the structure and operations of the CFPB, which was established during Obama's first term. Most specifically, they sought to replace the position of a single director with a board of directors, which consumer advocates said would weaken the agency.

Industry reaction low-key

Those in the mortgage and other financial industries largely took a conciliatory approach to Cordray's appointment, offering their congratulations and commending his qualifications, while stating that they still had concerns over some of the specific policies the agency is pursuing.

The statement by David Stevens, president and CEO of the Mortgage Bankers Association, was fairly typical of the industry response.

"The CFPB is an important agency that was created to protect consumers across the United States. Given the reach and influence this agency has on both businesses and consumers, it is important that we have stability and consistency in its highest ranks," Stevens said. "Under Richard Cordray's leadership, we have found the CFPB to be transparent and willing to listen to our concerns. We have not always agreed on the final outcome of CFPB rulemakings, and there remain a number of items related to the mortgage process that we will be working to address, but we are confident that we can make progress toward finding solutions regarding these issues."

The deal to end the filibuster over the nomination of Cordray and six other Obama appointees, including several to the National Labor Relations Board (NLRB) was reached after Senate Majority Leader Harry Reid threatened to invoke the "nuclear option" and simply issue a ruling from the chair that filibusters are not allowed on nominations to federal agencies.

However, a deal with a select group of Senate Republicans, led by Sen. John McCain of Arizona, worked out a deal where Cordray and six other nominees would be allowed to come up for a vote, in return for Obama dropping two NLRB nominees he had previously named through recess appointments in return for two new names.

Published on August 28, 2008