Financial watchdog director moves closer to approval -- or a brick wall
Obama's nominee must now be approved by the full U.S. Senate
President Obama's nominee to head the new consumer financial protection watchdog moved a step closer to approval Thursday as a key U.S. Senate committee voted to confirm the appointment.
|Nominated: Richard Cordray
Current job: Chief of enforcement, Consumer Financial Protection Bureau, January 2011 to present
Background: Attorney General of Ohio, January 2009 to January 2011. Former Ohio Secretary of Treasury and Treasurer of Franklin County, Ohio, Ohio State Representative and Solicitor General of Ohio. A former law school professor, U.S. Supreme Court clerk, he is a graduate of Michigan State University, Oxford University and the University of Chicago Law School.
Personal: Married, father of twins. Former "Jeopardy" champion.
What's next: Cordray faces a vote in the full U.S. Senate. There's no indication when the vote will be scheduled.
The Senate Banking Committee voted 12-10, along party lines, to approve Richard Cordray's nomination. However, the real battle over the nomination is expected in the next step -- when Cordray's appointment goes before the full Senate. Forty-four Republican senators have vowed to block the nomination unless the bureau is stripped of some of its powers.
Those Republican opponents have enough votes to block Cordray's confirmation by staging a filibuster -- a tactic used by lawmakers to to prevent a vote with continual debate. Since 60 of the 100 senators are needed to end a filibuster, the 44 senators can block Cordray's nomination indefinitely.
Cordray, 52, is a former Ohio attorney general. Obama nominated him to head the Consumer Financial Protection Bureau on July 18 -- just days before the new federal agency officially opened for business with broad powers to police credit cards, mortgages, student loans and other financial products.
The agency was created as part of the 2010 Wall Street reform law to help prevent abusive, deceptive and unfair practices surrounding a host of financial products. By law, the director must be confirmed by the U.S. Senate. Without a director in place, the agency cannot exercise its full authority to examine nonbank financial entities such as payday lenders, check-cashing stores and mortgage brokers.
The White House released a statement shortly before the committee convened stressing the importance of Cordray's nomination.
"Without a director, the CFPB is hamstrung in its ability to protect consumers," the statement reads. "Without a director, the CFPB will be unable to ensure that banks, debt collectors, private student loan providers and payday loan providers are properly supervised and that consumers are not put at risk of falling prey to the same kinds of abusive practices that helped cause the worst financial crisis since the Great Depression."
Tim Johnson, the South Dakota Democrat who heads the Banking Committee, said Cordray should be confirmed by the full Senate as soon as possible.
"Unfortunately Senate Republicans are blocking his confirmation, and in doing so, they are blocking vital new protections for consumers, and putting community banks and credit unions at a disadvantage to their less-regulated competitors," Johnson said in a statement released after the vote.
Republican Sen. Richard Shelby of Alabama said he and 43 others want more accountability and checks over the CFPB director. "No one person I believe should have such unfettered power over the American people," Shelby said during an earlier hearing on Cordray's nomination.
Lisa Donner, executive director of Americans for Financial Reform challenged Republican senators to "stand up for families" and confirm the nomination.
"Will you implement the law and make sure the CFPB can do its job helping people defend themselves from loan sharks big and small?" Donner asked. "Or will you block consumer protection and instead protect wrongdoing by companies that caused the financial crisis?"
See related: Obama nominates new consumer financial protection watchdog director, Your new financial watchdog: What it can do, New agency arrives to police financial products
Published: October 6, 2011