WASHINGTON — A day after the White House nominated former Ohio attorney general Richard Cordray to lead the Consumer Financial Protection Bureau, Republican senators who hold the key to his confirmation reiterated concerns Tuesday about the bureau's structure.
The choice of Cordray, now the bureau's enforcement director, solved the mystery over whom the administration would pick. But his appointment is far from assured. Forty-four GOP senators have pledged to block any nominee absent key reforms to the bureau's structure. They include having a multi-member board run the bureau, subjecting the regulator to the appropriations process and making it easier for the Financial Stability Oversight Council to weigh in on CFPB decisions.
At a Banking Committee hearing about new consumer regulations in the Dodd-Frank Act, Republicans claimed the administration had at one point supported similar reforms, and they objected to being blamed for slowing the bureau's work.
"President Obama himself agreed with each of these three principles when he sent his original proposal to Congress" for a financial reform law "back in 2009," said Sen. Jerry Moran, R-Kan. "Yet our request to return to these same principles is now being categorized as an attempt to kill the bureau in its infancy."
Democrats on the panel sang a different tune. Committee Chairman Tim Johnson, D-S.D., cited a poll showing strong support for a single agency charged with catching consumer abuses in the financial industry.
"And it is important to remember that most of the checks and balances imposed on this new regulator come from bipartisan ideas that were incorporated into the reform law during the months it was considered, and that the CFPB is modeled on the structure of existing financial services regulators," Johnson said.
With the nomination of Cordray, who has a strong consumer protection background that may turn off some bankers and Republicans, speculation has grown that President Obama could be open to considering the GOP's requested changes.
"We are open to negotiations on the structure," Sen. Richard Shelby, R-Ala., the panel's ranking member said to reporters, although he said he had not spoken to the White House regarding a possible deal to confirm Cordray.
Meanwhile, witnesses at the hearing said getting Cordray confirmed would ensure better parity in consumer oversight for banks and credit unions with that of nonbanks. Under Dodd-Frank, the bureau can begin issuing new rules for and supervising depository institutions as early as Thursday, but cannot begin monitoring the nonbank sector until a director is in place.
"We'd love to see a CFPB that is not subject to a political whipsaw," said Marcus Schaefer, chief executive of Truliant Federal Credit Union in Winston-Salem, N.C. "I think business would like it to be predictable what we're going to be subject to."
