GOP lawmakers grill consumer finance chief

Senate Republicans used the confirmation hearing for the head of President Obama’s Consumer Financial Protection Board to signal their continued unhappiness with the agency’s funding and what they said was its lack of accountability.

Richard Cordray, who has led the fledgling CFPB thanks to a recess appointment by Mr. Obama after Republicans blocked his nomination in December 2011, went before the Senate Banking Committee on Tuesday seeking a full term as head of the agency that was a centerpiece of the administration’s financial regulatory reform law.

Members of both parties praised his work over the past year, but Republican senators revived criticisms of the board’s structure, which calls for a single leader, rather than a board of directors, and demanded more financial accountability from the consumer watchdog agency. 

Republican senators warned they will again block Mr. Cordray’s nomination until these concerns are addressed.

“I believe that structural changes to the CFPB are essential,” Sen. Mike Crapo of Idaho, ranking Republican on the panel, said during the hearing. “Moving from a single director to a board format will bring about transparency and openness.”

But Democrats said it was time for CFPB critics to set aside these grievances and give the agency some certainty in its leadership.

“It’s critical that we put partisan politics aside and confirm Rich Cordray,” said Sen. Sherrod Brown, a Democrat and fellow Ohioan, who introduced Mr. Cordray at the Senate hearing. “Consumers deserve a bureau with a confirmed director who can serve as a counterbalance to the Wall Street lobby.”

Senate Republicans have also called for changes in the CFPB’s funding structure, which does not rely on appropriated money from Congress to finance its operations.

Mr. Cordray, who was accompanied by his wife, Peggy, and twin children, Danny and Holly, told the Senate committee that his goal is to protect American consumers from corrupt banks and financial fraud.

“They deserve a fair shake, and they deserve to have this agency standing on their side to make sure they are treated fairly,” he testified.

If Mr. Cordray is not confirmed, his appointment will expire at the end of the year — or sooner if it is ruled invalid. 

His appointment is under a constitutional cloud after a federal court recently tossed out Mr. Obama’s recess picks for the National Labor Relations Board — who were named the same day as Mr. Cordray. The judge, whose decision the NLRB appealed to the Supreme Court Tuesday, ruled Mr. Obama overstepped his recess appointment powers. 

Mr. Cordray wasn’t without support among the GOP minority. Sen. Tom Coburn, Oklahoma Republican, praised the CFPB chief during the hearing.

“I think you’ve done a wonderful job so far,” Mr. Coburn said. “I’m going to aggressively support your nomination. The more I find out about you, the more I like you.”

The banking committee also heard testimony from Mary Jo White, Mr. Obama’s choice to head the Securities and Exchange Commission.

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