ALG Blasts Obama Appointment of Financial Czar

September 17th, 2010, Fairfax, VA—Americans for Limited Government President Bill Wilson today condemned the appointment of Elizabeth Warren as a special assistant to Barack Obama in order to avoid a tough confirmation battle in the Senate.

“Rather than engage in the constitutional process of Senatorial advice and consent, and nominate Warren to the post of Director of the Financial Protection Bureau, Obama has simply created a new financial czar post to avoid a bruising Senate battle over her radical views,” Wilson said.

Warren’s potential nomination has been sidelined amid objections by the Senators of both political parties, including Senator Chris Dodd, one of the principal architects of the Consumer Financial Protection Bureau (CFPB). Warren has advocated for moratoria on foreclosures of Fannie Mae and Freddie Mac mortgages and supported court-ordered cramdowns on the principal owed on mortgages.

Wilson said that the appointment violated the language of the Dodd-Frank financial bill, because the Director of the CFPB is supposed to be confirmed by the Senate. According to Section 1011(b)(2) of the new legislation, the Director and Deputy Director of the agency “shall be appointed by the President, by and with the advice and consent of the Senate.”

“The Bureau cannot function at all without a director, under the law Obama signed,” Wilson said. “The Director is responsible for whatever rules and regulations the Bureau produces, for staffing, for any reports crafted by the Bureau; in short, everything. The law does not contemplate the agency functioning without a director.”

But, as reported by the Washington Post, “Warren is expected to take on a dual role as assistant to the president and special adviser to Treasury Secretary Timothy F. Geithner, giving her primary responsibility for shaping the consumer watchdog in the coming months.”

Geithner, it appears, would actually have the role of “acting director” in lieu of a Senate confirmation. Wilson said the only reason it was possible legally for Geithner to head the agency was because the Vacancies Act allows for an “acting director” of an “executive agency” to be appointed. The CFPB was dubbed an “executive agency” under the Dodd-Frank bill.

Warren is ineligible under the Vacancies Act to be named “acting director” because she is not a currently serving confirmed official, a senior agency employee who served for 90 days or more, nor the Deputy Director of the agency. Wilson said her ineligibility to be appointed acting director was “most likely the real reason for her being named advisor, which means this was the only way they could get her in there over Senate objections.”

“But it doesn’t matter,” said Wilson, “because the Vacancies Act is clearly unconstitutional. It allows for appointments to confirmable positions without any confirmation while Congress is in session. The Constitution only allows non-confirmed appointments in the context of being recess appointments. If Obama has a nominee for this agency, and Congress is in session, he only has one option: nominate her and await the Senate’s judgment.”

“If the agency operates without a confirmed director, the legitimacy of the acts of the agency will be called into question,” Wilson said.

Wilson called for Congress to repeal to the Vacancies Act, saying, “In the Vacancies Act, Congress may have abdicated its constitutional authority for the Senate to confirm appointments, but that doesn’t make it constitutional. Barack Obama is completely ignoring what the Constitution says. The American people are crying out for the rule of law, but their pleas appear to be nothing more than an annoyance to the White House,” Wilson said.

“The White House can dress this up however they want. They can pretend Warren’s not leading this agency, whose task will be to run the financial sector into the ground, but everyone knows that she will be heading the agency,” Wilson concluded.

Interview Availability: Please contact Richard Manning at (703) 383-0880 or at to arrange an interview with ALG President Bill Wilson.