The nomination of Richard Cordray to lead the Consumer Financial Protection Bureau is widely expected to be blocked by Senate Republicans Thursday, despite a hard push by the Obama administration and Senate Democrats.
Cordray, a former Ohio Attorney General, has been held up in the confirmation process since July — caught in the middle of a bitter battle over the new federal agency.
The agency was created by the Dodd–Frank Wall Street Reform and Consumer Protection Act in response to the 2008 financial crisis and will have authority to regulate banks, mortgage lenders, credit card companies and other financial services in an attempt to protect consumers from predatory business practices.
GOP senators say their objections are not with Cordray but with the rules governing the CFPB. Forty-four Republicans signed a letter in May vowing to filibuster any nominee to the CFPB until changes are made to add what they say are much needed oversight controls to the agency.
Specifically, Republicans say there is little opportunity to overturn the CFPB director’s decisions, and that there is not an appropriate structure in place to remove an acting director. The current process, Republicans said, makes challenging the director’s decisions so onerous as to be useless.
Maine Republican Sen. Susan Collins, who voted in favor of the Dodd-Frank reforms, told reporters Tuesday that Cordray is “clearly a qualified individual,” but “I am completely opposed to appointing a nominee to head this bureau until we correct the very serious structural flaws that are in the bill.”
“It is inconceivable that in this time of tight budgets that we would create a new agency that is completely unaccountable in terms of its budget,” which may be more than $500 million, Collins said.
Democrats only control 53 votes in the Senate, and 60 are required to break a filibuster. The only Republican senator to endorse Cordray is Scott Brown of Massachusetts.
The White House and Senate Democrats have pushed back hard, claiming Republicans are obstructing the nomination at the expense of consumers and for the gain of Wall Street bankers.
“Wall Street has a legion of lobbyists protecting its interests. We need someone who can protect Main Street’s interest,” said New Jersey Sen. Bob Menendez in a Wednesday press conference with other Democratic members of the Senate Banking Committee. “And that’s what Richard Cordray would be as the director of the Consumer Financial Protection Bureau.”
In a continuation of its strategy of appealing to voters to bring indirect pressure on Republicans, the Obama administration hit the road this week to tout Cordray and the CFPB.
Obama pushed the Cordray nomination during his speech in Kansas Tuesday. He also has interviews scheduled Thursday with television stations in Alaska, Indiana, Iowa, Maine, Nevada, Tennessee and Utah.
The White House argues the new agency will be hamstrung in its task without a director. According to a statement issued Sunday by the White House’s National Economic Council, the CFPB will not be able to fully regulate payday lenders, debt collectors, credit reporting agencies and private student lenders.
“We cannot afford a system in which consumers are left in the dark about the risks they face when making financial decisions,” the report said. “Every day that CFPB goes without a director is another day that American families remain at risk.”
Senate Republicans say they have heard nothing from the White House regarding their complaints.