Richard Cordray wins panel’s vote for consumer watchdog, but confirmation fight wages on


Richard Cordray, nominee for director of the Consumer Financial Protection Bureau, at a confirmation hearing before the Senate banking committee. (T.J. Kirkpatrick/GETTY IMAGES)
March 19, 2013

Democrats on the Senate banking committee on Tuesday approved the nomination of Richard Cordray to head the Consumer Financial Protection Bureau — just as they did nearly two years ago.

Clearing the committee, even by a slim 12-10 margin, was a minor feat. The real hurdle will come on the Senate floor. Cordray’s nomination remains at the center of a larger political fight over the structure of the watchdog agency and, although the Democrats have 55 seats in the Senate, a single Republican could filibuster a final vote.

Lawmakers say they have no qualms about Cordray, who is widely praised by consumer and industry groups alike.

But Senate Republicans are demanding that the CFPB be subject to annual appropriations and led by a five-member board for greater transparency and accountability. Republicans have vowed to block the confirmation of any director unless President Obama relents.

The White House, however, insists that the bureau remain an independent regulator. Senate Majority Leader Harry M. Reid (D-Nev.) has not scheduled a floor vote on Cordray’s nomination, and his office did not respond to requests for comment.

Tensions over the CFPB came to a head in late 2011, when Obama installed Cordray to run the agency through a recess appointment. Republicans were livid about the end run, which staffers say poisoned the waters for Cordray.

Obama could use another recess appointment to keep Cordray, whose term expires at the end of the year, in place. The White House has not indicated whether the president is entertaining that option and did not return a call for comment.

In the past month, Sens. Elizabeth Warren (D-Mass.), Sherrod Brown (D-Ohio) and Jack Reed (D-R.I.) have waged a campaign in support of Cordray’s confirmation.

Warren, who crusaded for the creation of the agency four years ago, has found herself still fighting to keep it intact.

“Cordray has earned a reputation as an effective and balanced regulator” and deserves an up-or-down vote, Warren said in an e-mail. “The Senate needs to focus on how to put an end to practices that cheat families in their mortgages and credit cards.”

Warren and her Democratic colleagues are in for a fight, as the war to dismantle the CFPB is being waged on multiple fronts. There are at least three bills and one ongoing court case aimed at turning the bureau into a five-member commission.

A federal appeals court ruling questioning the constitutionality of recess appointments also poses a threat to the bureau. Although the ruling targets three members of the National Labor Relations Board, it could help a separate lawsuit seeking to use the same constitutional argument to remove Cordray.

Meanwhile, Mary Jo White, who shared a nomination hearing with Cordray, faces no real opposition to head the Securities and Exchange Commission.

Senate staffers say the former U.S. attorney, who sailed through the committee with a 21 to 1 vote, has broad bipartisan support.

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