Obama to name new consumer watchdog

Jacquelyn Martin / AP file

President Barack Obama will use a recess appointment to name Richard Cordray, pictured above, as chief consumer watchdog despite strong Republican opposition, White House communications director Dan Pfeiffer announced in a tweet.

By John W. Schoen, Senior Producer

The long-delayed start of a new consumer protection bureau took a major step forward Wednesday with an end run by the White House around Congressional Republicans who had been holding out for changes that consumer advocates say would have substantially weakened the agency.

President Barack Obama will use a recess appointment to name Richard Cordray as the nation's chief consumer watchdog despite strong Republican opposition,?White House communications director Dan Pfeiffer announced in a tweet.?

?The consumer agency was created after the 2008 financial industry meltdown, championed by Harvard law professor Elizabeth Warren, who had lobbied heavily for an new, independent financial regulator devoted solely to the protecting the interests of consumers. But her forceful attacks on the financial services industry made her appointment to head the new agency politically untenable. ?

In an effort to remove that political obstacle, Obama nominated Cordray, a former Ohio Attorney General, to head the agency. But the nomination has been stalled as Senate Republicans insist on changes that would subject the CFPB to greater oversight by existing regulatory agencies.

"There is an army of lobbyists and lawyers right now working to water down the protections and the reforms that we passed,? Obama said in July when he nominated Cordray to head the new Consumer Financial Protection Bureau. ?They've already spent tens of millions of dollars this year to try to weaken the laws that are designed to protect consumers. And they've got allies in Congress who are trying to undo the progress that we've made.?

Following Cordray's nomination, Senate opponents vowed to block the appointment of any director until they won substantial changes in the make-up and funding of the new bureau.?

"Until President Obama addresses our concerns by supporting a few reasonable structural changes, we will not confirm anyone to lead it," said Alabama Sen. Richard Shelby, the ranking member of the Senate Banking Committee, said in July. "No accountability, no confirmation."

Obama's end run around the Senate is likely to cause an uproar among Republicans in Congress. Before leaving for its holiday break, the Senate imposed a schedule of "pro forma" legislative sessions to bock a recess appointment. The White House believes the schedule is a gimmick that?doesn't?interfere with Obama?s the power to make the short-term appointment. Cordray would serve for at least the next two years.

The legislation creating the agency put the CFPB?s rule-making on hold until a director was named. Some 18 months after Congress created a new agency to protect consumers from predatory lending, has yet to begin writing new regulations.?

Consumer groups hailed the move.

?American consumers can not wait any longer while Senate Republicans and industry lobbyists play games with the nomination process,? said Lauren Saunders, managing attorney at the National Consumer Law Center. ?With a director finally in place and no question about its powers, the Consumer Financial Protection Bureau can start scrutinizing unfair practices by debt collectors, mortgage brokers, credit reporting agencies, and predatory payday lenders.??

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Source: http://bottomline.msnbc.msn.com/_news/2012/01/04/9947364-obama-to-name-new-consumer-watchdog

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