Former federal prosecutor and securities lawyer Mary Jo White was sworn in as the 31st chair of the Securities and Exchange Commission (SEC) on April 10, two days after her nomination was confirmed by the U.S. Senate by voice vote. However, tension over another key nomination is still ramping up.
“It is an honor to lead the talented and dedicated SEC staff on behalf of America’s investors and markets,” White said. “Our markets are the envy of the world precisely because of the SEC’s work effectively regulating the markets, requiring comprehensive disclosure and vigorously enforcing the securities laws.”
White’s confirmation process was no cake walk. During her March 13 confirmation hearing, lawmakers on both sides of the aisle grilled White on how she would address issues like regulatory cost-benefit analysis and the pace of rulemaking under Dodd-Frank and the Jobs Act. She also addressed questions regarding the perception that the SEC hasn’t been tough enough on lawbreakers, pledging “bold and unrelenting” enforcement.
White also faced questions regarding conflicts of interest concerning her tenure as chair of the litigation department at mega law firm Debevoise & Plimpton LLP. White said she underwent a rigorous process to make sure she is in compliance with all ethical issues, that she planned to frequently consult with SEC ethics officials and has already engaged in discussions concerning a “vigilant screening process.”
Despite vocal opposition from some quarters, White’s Senate confirmation was relatively painless. However, tension over another key nomination battle is ramping up quickly.
White was nominated to lead the SEC on Jan. 24, the same day as President Barack Obama nominated Richard Cordray to continue leading the Consumer Financial Protection Bureau (CFPB). Obama invoked his recess appointment powers under the U.S. Constitution to install Cordray as the bureau’s first permanent director in January 2012 after Republicans blocked a vote on the nomination. Cordray’s recess appointment will expire at the end of this year if he is not confirmed by the Senate.
As they did in 2011, Republicans vowed to block Cordray’s latest nomination unless Democrats agree to certain changes intended to increase the bureau’s transparency and accountability.
Not long after the re-nomination, Republicans were emboldened when a federal appeals court invalidated three nominations to the National Labor Relations Board that also bypassed Senate confirmation last year. The court didn’t mention Cordray, but the ruling cast doubt on Cordray’s appointment and the bureau’s activities under his leadership.
With Cordray’s nomination, and potentially the CFPB’s work in doubt, neither side is giving any ground. However, Senate Majority Leader Harry Reid, D-Nev., recently told Nevada Public Radio that his party has the power to break the stalemate at any time by changing the rules of the Senate by a simple majority effectively nixing Republicans’ ability to block an up or down vote on Cordray’s nomination and other nominations that are currently in limbo.
Reid said the move would be a “nuclear option,” but he’s ready to press the button if necessary.
“If the Republicans in the Senate don’t start approving some judges and don’t start helping get some of these nominations done, then we’re going to have to take more action,” Reid said.