Published October 06, 2011
The Senate Banking Committee voted to approve President Obama’s pick to become the nation’s first consumer watchdog over stiff Republican opposition.
Cordray’s nomination now heads to the full Senate for a vote, and Republicans are threatening to block it unless the bureau’s power is weakened. But the White House is standing firm against overhauling the agency.
President Obama expressed frustration over the fate of Cordray’s nomination Thursday during a news conference, saying Republicans want to block it not because of anything he’s done wrong, but because they want to “roll back” the notion of having a consumer agency.
“That does not make sense to the American people,” he said. “They are frustrated by it and will continue to be frustrated by it.”
The agency was created by the Dodd-Frank legislation regulation the financial industry after the 2008 crisis. Most Republicans opposed the legislation and believe the agency has too much power.
The agency was created by the Dodd-Frank legislation, which was designed to regulate the financial industry after the 2008 crisis. By law, the bureau cannot exercise all its powers without a director, including issuing new rules for payday lenders and other financial firms that are not banks.
Obama nominated Cordray, 52, to head the bureau in July, just as it was opening its doors for the first time. The president had appointed consumer advocate Elizabeth Warren to help set up the bureau, but decided not to nominate her to become its director in the face of strong opposition from Republicans, who considered her too much of an activist.
GOP lawmakers from both chambers want several changes, including replacing the bureau's director with a bipartisan commission, making it easier for other financial regulators to overrule the bureau and giving Congress direct power over the agency's budget. Currently, the bureau gets its money from the Federal Reserve, of which it technically is a part.
In May, 44 Senate Republicans signed a letter saying they will oppose any nominee without a revamping of the bureau that would include such changes. Democrats who control the 100-member Senate can only count on 53 votes to end delaying tactics -- seven short of the 60 needed to do so.
Cordray has been the bureau's enforcement chief in recent months, and as Ohio attorney general brought headline-grabbing lawsuits against some of the country's biggest banks over their foreclosure practices. Amid rumblings that he might be interested in running for higher office in Ohio, Cordray told the senators that he has "no plans to run for any political office."
The Associated Press contributed to this report.