State attorneys general push for Cordray to lead federal consumer agency

October 18, 2011

The White House has enlisted a bipartisan coalition of state attorneys general to help break a blockade by Senate Republicans of President Obama’s nominee to lead the controversial new federal consumer watchdog agency.

The National Association of Attorneys General on Tuesday sent a letter to Senate leaders calling nominee Richard Cord­ray “brilliant and balanced.” Cordray was an attorney general in Ohio known for his aggressive pursuit of foreclosure fraud before joining the Consumer Financial Protection Bureau (CFPB) as head of enforcement in January. This summer, Obama picked him to lead the fledgling agency, and he now awaits Senate confirmation.

“We understand the political nature of this,” said Utah Attorney General Mark Shurtleff, a Republican who still has reservations about the bureau. But, he said, “if there’s gonna be a director, we can’t think of anybody who would be better.”

Cordray has been caught in the middle of a political standoff over what the CFPB should look like. Though lawmakers from both parties have praised his experience and qualifications, Senate Republicans have vowed to block any nominee unless structural changes are made to the bureau.

In a letter to Obama this spring, they called for replacing the director with a five-member board, requiring the agency to go through Congress for funding and increasing oversight.

“We haven’t heard from the president. Maybe he’s off campaigning,” Sen. Richard C. Shelby (R-Ala.) said last week in an interview with the Heritage Foundation. “Until we hear from him, I don’t believe we’re going to confirm anyone.”

The CFPB was created last year when Congress approved a massive overhaul of the nation’s financial system. The bureau merges powers previously dispersed among seven different agencies, but it lacks the authority to write many new rules and oversee financial institutions such as payday lenders until a director is confirmed.

Obama has been criticized for waiting until nearly a year after the CFPB was created to pick his nominee. But as the Occupy Wall Street protest movement grows and consumer anger flares over new bank fees, Obama has repeatedly mentioned the need for a director.

On Tuesday, Obama economic adviser Brian Deese joined attorneys general on a conference call with reporters that was organized by the White House. He said their letter was intended to increase the stakes for Republicans “to answer the question of why they aren’t acting.”

“It’s important from our perspective to continue to push and continue to add voices,” he said. “There is no reason why the Senate cannot and should not move forward.”

Earlier this month, the Senate banking committee approved Cordray’s nomination along party lines. This cleared the way for a full Senate vote — although the timing remains unclear.

Senate Majority Leader Harry M. Reid (D-Nev.) on Tuesday blamed Republicans for holding up his confirmation.

“It’s really unfortunate that we have this obstructionism,” he said.

Ylan Q. Mui is a financial reporter at The Washington Post covering the Federal Reserve and the economy.
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