Published July 18, 2011
WASHINGTON -- President Obama will introduce former Ohio Attorney General Richard Cordray on Monday as his nominee to head a new consumer financial protection bureau that was a central feature of a law that overhauled banking regulations.
Obama plans to announce the nomination at a White House event.
In choosing Cordray, Obama bypassed Elizabeth Warren, a favorite of consumer groups, who has been assembling the agency as a special adviser to the White House and to Treasury Secretary Timothy Geithner.
The agency will officially begin its oversight and regulatory work on July 21. Its role is to be a government watchdog over mortgages, credit cards and other forms of lending.
"Richard Cordray has spent his career advocating for middle-class families, from his tenure as Ohio's attorney general, to his most recent role as heading up the enforcement division at the CFPB and looking out for ordinary people in our financial system," Obama said in a statement.
Cordray will have to be confirmed by the Senate. Warren, who is considered the architect of the consumer bureau, faced opposition in the Senate and would have had a difficult time wining confirmation.
Cordray, 52, is considered a Warren ally and has been working with her as director of enforcement for the agency.
Republicans fought fiercely against the creation of the bureau last year and have been trying to place restrictions on the agency. In May, all Senate Republicans joined in a letter to Obama threatening to withhold their support for any nominee to the position if the White House didn't seek significant changes to the agency.
Among the changes would be to replace a single director with a board and to make the bureau's finances subject to congressional approval.
"The White House has not yet addressed the need to bring accountability and transparency to the bureau," Don Stewart, a spokesman for Senate Republican leader Mitch McConnell, said Sunday.
The Progressive Change Campaign Committee, which had backed Warren, issued a statement supporting Cordray.
"With her track record of standing up to Wall Street and fighting for consumers, Elizabeth Warren was the best qualified to lead this bureau that she conceived -- and we imagine Richard Cordray would agree," said the committee's co-founder, Stephanie Taylor. "That said, Rich Cordray has been a strong ally of Elizabeth Warren's and we hope he will continue her legacy of holding Wall Street accountable."
But consumer advocate and one-time presidential candidate Ralph Nader called bypassing Warren "an act of political cowardliness by President Obama."
"Elizabeth Warren apparently is just too good, too smart, too able to arouse the just concerns of millions of American families over the need to put the law-and-order wood to the corporate criminals, defrauders and reckless speculators," Nader said.
Though Democrats control the Senate, Republicans could block the appointment through a filibuster.
In pushing for changes in financial regulations last year, Obama focused on the popular appeal of a consumer bureau, which he had proposed as an independent agency. It was during that debate that Obama referred to bankers as "fat cats," a characterization he has since abandoned.
The regulatory overhaul was a response to the financial crisis of 2008 that helped plunge the country into a recession.
In a compromise, the consumer agency was placed within the Federal Reserve, but will act autonomously from the central bank.
In his statement, Obama thanked Warren "for her many years of impassioned leadership, and her fierce defense of a simple idea: ordinary people deserve to be treated fairly and honestly in their financial dealings."
Obama also said: "This agency was Elizabeth's idea, and through sheer force of will, intelligence, and a bottomless well of energy, she has made, and will continue to make, a profound and positive difference for our country."