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Posted at 12:10 PM ET, 12/08/2011

Senate blocks Richard Cordray confirmation to head consumer watchdog agency

Editor’s Note: This post was inadvertently published early, before the vote. The vote has now occurred.

In a long-awaited vote Thursday morning, Senate Republicans blocked the confirmation of President Obama’s nominee to lead his signature consumer watchdog agency, a move that prevents it from exercising many of its broad new powers.

Republicans relied on a procedural vote to keep the Senate from even considering former Ohio attorney general Richard Cordray for the top job at the Consumer Financial Protection Bureau.

By a vote of 53 to 45, Senate Democrats were unable to close off debate to allow the confirmation to proceed; 60 votes were needed to end a filibuster and proceed. 

Though GOP lawmakers have praised Cordray’s qualifications for the job -- he currently serves as the CFPB’s director of enforcement -- they have pledged to prevent any candidate from being confirmed unless significant structural change are made to the bureau.

Obama quickly denounced the action, saying at a short news conference: “This makes no sense. Consumers across the country undertand part of the reason we got into the financial mess we did is because regulators are not doing their jobs. ... There is no reason why Mr. Cordray should not be nominated or confirmed by the Senate and should not be doing this job.

“We are not giving up on this; we’ll keep on going at it. We will not allow politics as usual on Capitol Hill to stand in the way of American consumers being protected from unscrupulous operators.”

Obama added that no options are off the table with Cordray, including a potential recess appointment during the holidays, a move that Congress could not block.

Republicans want the director replaced by a five-member commission and tighter oversight of the agency’s decisions by other regulatory bodies. They are also seeking to subject the CFPB to the congressional appropriations process; currently, it is funded through the Federal Reserve.

Democrats have balked at those requests, leaving the leaderless bureau trapped in a political stalemate. Though the CFPB can enforce existing consumer regulations, it cannot begin oversight of so-called “nonbank” financial institutions such as payday lenders, prepaid card providers and private student lenders until a director is confirmed.

It remains unclear what the next step for the Obama administration will be. The White House has been reluctant to name a director through recess appointment despite pressure to do so by several Democratic lawmakers and consumer advocacy groups.

In addition, Republicans have prevented the Senate from going on recess at all, instead holding pro forma sessions aimed at blocking any appointments. According to the Congressional Research Service, the shortest recess during which a presidential appointment has been made in the last 20 years was 10 days. The appointee also could only serve until the next session of Congress; a confirmed CFPB director would serve for five years.

Only two of the 47 Republicans in the Senate did not vote to block Cordray’s confirmation. One was Sen. Olympia Snowe (R-Maine), who voted “present.” The other was Scott Brown of Massachusetts, who is facing the CFPB’s original architect, Elizabeth Warren, in the 2012 Senate race.

“I disagree with Republicans on this issue,” Brown said in a statement explaining his “yes” vote. “Mr. Cordray deserves an up or down vote, and I look forward to supporting his nomination. Having a leader at the helm is critical at a time when the agency is getting up and running. The unfortunate truth is that there are still bad actors in the financial system who will take advantage of vulnerable people in our society.”

Staff writers Rosalind S. Helderman and David Nakamura contributed to this report.

This story initially misreported one of the Republican senators voting not to block Cordray. It has been corrected.

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By  |  12:10 PM ET, 12/08/2011

 
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