While Treasury Secretary Geithner warned against undermining efforts to stall or water down financial regulation, Senate Republicans are refusing to confirm nominees to crucial financial regulatory posts. As was widely reported, the Senate stayed in pro forma session the week before last in order to block the recess appoints of Elizabeth Warren and others. With the “transfer date” of July 21st fast approaching there is a growing concern that the CFPB needs a director, because until a director is confirmed, the Bureau may be hamstrung in some of its functions, including defining its authority over non-bank financial service providers. Treasury has the ability to extend the transfer date by up to six months, so there is a chance that Warren could ultimately be appointed during a recess appointment in August.
In addition to Warren, the Administration has been trying to fill other key vacancies at agencies tasked with implementing Dodd-Frank. However, instead of reducing the number of positions, recent departures have only resulted in additional vacancies. First, on June 5th, Peter Diamond, President Obama‟s nominee to the Federal Reserve Board of Governors, asked the White House to withdraw the nomination due to Republican opposition. Then, Chairman of the Council of Economic Advisors (CEA), Austan Goolsbee announced that he would be returning to academia in the fall. A former administration official said that the next CEA chairman will likely come from outside the administration to ensure the confirmation process is smooth and “so that the confirmation hearings can be less of a retrospective on Obama‟s policies to date and more of a forward-looking discussion of what could and should be done.”