Senate Republicans on Tuesday sharply questioned President Obama's nominee to
head the Consumer Financial Protection Bureau about the agency's finances and
gave no sign of backing off a pledge to block his confirmation unless the CFPB's
structure is changed.
Richard Cordray, who has been the bureau's director for a year, defended the agency's budget at his confirmation hearing and touted the CFPB's early accomplishments on mortgage and credit card rules. The bureau was created in 2010 under the Dodd-Frank financial reform act adopted after the financial crisis.
The Senate banking committee hearing also considered President Obama's nomination of former U.S. Attorney Mary Jo White to head the Securities and Exchange Commission. White sought to dispel some concerns that her work as a lawyer defending Wall Street banks in the past decade could conflict with her new role regulating such firms.
"It will be a high priority throughout my tenure to further strengthen the enforcement function of the SEC -- it must be fair, but it also must be bold and unrelenting," she said.
She generally received bipartisan praise for a celebrated career as a hard-nosed New York prosecutor and is expected to easily win confirmation. Cordray's appearance, by contrast, renewed a heated partisan debate, not about Cordray, but about the consumer watchdog agency itself.
Their nominations are considered key as regulators move to implement Dodd-Frank. The SEC and other agencies are still drafting many rules to put the act's provisions into force.
Cordray, formerly Ohio's attorney general, has served as director of the CFPB since January 2012. Obama placed him in the post with a recess appointment after Senate Republicans blocked his nomination.
Obama renominated him in January, but 43 Senate Republicans vowed to block his confirmation again unless Democrats agree to revamp the bureau. They want it overseen by a bipartisan commission, rather than a director, and its budget approved by Congress rather than tied to the Federal Reserve's budget.
"Unfortunately, the CFPB lacks this transparency and openness regarding its operations, budget and intended mission," said Idaho Sen. Mike Crapo, the ranking Republican on the banking committee.
Freshman Sen. Elizabeth Warren, D-Mass., who proposed the CFPB while she was a Harvard professor, assailed Republicans for blocking a director's nomination because of their opposition to an agency's structure. She said the move has weakened the agency, adding, "It's bad for consumers, it's bad for small banks, it's bad for credit agencies."
For his part, Cordray noted the CFPB has handled more than 130,000 complaints, helped defrauded consumers recover hundreds of millions of dollars and adopted new rules to protect mortgage borrowers and credit card holders.
"As the economy recovers, we want people to know they now have a new agency ... looking out for their interests," he said.
White, meanwhile, dismissed the concerns of some Democrats that her experience defending Wall Street firms such as JPMorgan Chase could cause her to go easier on them.
"The American people will be my client, and I will work as zealously as possible on behalf of them," said White, who helped successfully prosecute mobster John Gotti and terrorists involved in the 1993 World Trade Center bombing.
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