Cordray's nomination has been blocked by Senate Republicans who have conditioned their support on the administration and Congress first weakening the CFPB, the creation of which, in the wake of the financial crisis, most Republicans opposed. In response, President Obama offered Cordray a recess appointment, but the legal basis for recess appointments in general has been called into question by an appeals court decision earlier this year. That is Hensarling's hook.
The D.C. Circuit Court of Appeals held that President Obama exceeded his recess appointment power when he named three members to the National Labor Relations Board over one year ago. Obama cited the same power when he placed Cordray at the helm of CFPB simultaneously.
"The court's unanimous ruling makes it clear that there is no legally-appointed director of the CFPB at this time," Hensarling said. The expansive ruling would actually invalidate nearly every exercise of the recess appointment power.
Deepak Gupta, former Senior Counsel at CFPB and founder of the Gupta Beck law firm takes issue with Hensarling's argument.
"This is a truly preposterous political stunt. It's hard to see what it will accomplish, other than adding more bluster to the fight over the CFPB," Gupta tells TPM by email. "[I]t's of course true that the D.C. Circuit's decision has called President Obama's recess appointments into question. But no court has actually ruled on Cordray's appointment. Until that happens, he is the Director of the Consumer Financial Protection Bureau -- both legally and in fact.... Why not let him testify about the job he's actually doing?"
Cordray has of course testified before the Financial Services Committee several times. But Hensarling is now officially calling his legitimacy into question, and will not invite him to testify again until he's confirmed -- something Senate Republicans say will not happen unless Democrats agree to statutorily weaken the agency.
In the meantime, Hensarling promises to continue his oversight by inviting more junior employees of CFPB to testify in Cordray's stead.
This post has been updated