Bloomberg News

U.S. Senate Republicans Block Cordray for Consumer Bureau

December 12, 2011

(Updates with Obama, Schumer comments and vote details starting in second paragraph.)

Dec. 8 (Bloomberg) -- Republicans in the U.S. Senate today blocked the nomination of Richard Cordray as the first director of the Consumer Financial Protection Bureau. The vote, on a motion to end debate, was 53-45, with 60 votes required to move the nomination ahead.

In a televised statement after the vote, President Barack Obama insisted his administration would continue its efforts to get Cordray, a former Ohio attorney general, into the job.

“We are not giving up on this,” Obama told reporters. “We are going to keep going at it.”

Asked whether he was contemplating a recess appointment, Obama told reporters he “won’t take any options off the table.”

So far, Republicans have prevented Obama from making recess appointments by holding short sessions, just a few minutes each, during vacation periods. A recess appointment allows a president to put people temporarily in posts that normally would require Senate confirmation by naming them when Congress has formally adjourned.

After the vote, the Senate’s third-ranking Democrat called on Obama to use “all possible means” to get Cordray, now the bureau’s top enforcement official, into the director post.

“He should do everything within his power to get Cordray on board,” Senator Charles Schumer of New York told reporters.

Senate Democrats and the White House had pressed for the vote, even though it was clear that Republicans had enough votes to block the motion to end debate.

Republican Letter

In May, 44 Senate Republicans pledged to oppose any nominee for the position of director until changes are made in the structure and funding of the agency. Senator Dean Heller of Nevada subsequently made for a bloc of 45 who said they would oppose confirmation of any appointee. Republicans hold 47 Senate seats.

“The president has made his decision and we’ve made ours,” Republican leader Mitch McConnell of Kentucky said on the Senate floor before the vote.

McConnell has repeatedly complained that Democrats never responded to their letter. Schumer said no answer or offer to compromise would be forthcoming.

“We will never engage in any attempt to permanently gut this agency,” Schumer said. “We will not negotiate with them on any plan.”

Limited Powers

Without a confirmed director, the consumer bureau cannot use key powers accorded it under the Dodd-Frank law, notably the ability to regulate non-bank financial institutions such as mortgage originators and payday lenders.

Treasury Secretary Timothy Geithner said in a statement that “Americans deserve the full protections signed into law under Wall Street reform. The longer the Senate fails to confirm Richard Cordray to lead the Consumer Financial Protection Bureau, the longer they will be denied that protection.”

Noting that Republicans had not challenged Cordray’s qualifications for the job, Senate Majority Leader Harry Reid accused opponents, most of whom voted against Dodd-Frank, of straightforward opposition to federal consumer protection.

“This is the first time in Senate history a party has blocked a qualified candidate solely because they disagree with the existence of the agency that’s being created by law,” Reid, a Nevada Democrat, said on the Senate floor.

In today’s vote, all Republicans opposed the motion to end debate except for Senator Olympia Snowe of Maine, who had signed the letter in May and voted “present,” and Senator Scott Brown of Massachusetts, who voted “yea.”

Senator John Kerry, a Massachusetts Democrat, did not vote.

Elizabeth Warren

Obama nominated Cordray, who is currently the agency’s enforcement chief, to be the bureau’s director in July, about a year after signing the Dodd-Frank financial regulatory overhaul into law. The president had considered naming Harvard Law School professor Elizabeth Warren, a longtime consumer advocate who set up the bureau, but backed down after then-Senator Christopher Dodd, a Connecticut Democrat, said that she could not win confirmation.

Warren is now seeking the Democratic nomination to run against Brown in Massachusetts for his Senate seat next year.

“I have a word for some of my Republican friends,” Schumer told reporters. “If they think they can keep silencing these strong consumer advocates, they just mind find one joining us on the Senate floor a year from now.”

--With assistance from Leslie Hoffecker in Washington. Editors: Leslie Hoffecker, Mark Silva

To contact the reporter on this story: Carter Dougherty in Washington at cdougherty6@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


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