Stalemate Over New Consumer Watchdog Group

By Tom Giusto

Oct 6, 2011 4:43pm

At his news conference today, President Obama weighed in on a potential deadlock in Congress over his nominee to head a consumer financial watchdog group.

“We’re going to have a hearing on Richard Cordray, who is my nominee to head up the Consumer Financial Protection Bureau.  He would be America’s chief consumer watchdog when it comes to financial products.  This is a guy who is well regarded in his home state of Ohio, has been the treasurer of Ohio, the attorney general of Ohio.  Republicans and Democrats in Ohio all say that he is a serious person who looks out for consumers.  He has a good reputation.  And Republicans have threatened not to confirm him not because of anything he’s done, but because they want to roll back the whole notion of having a consumer watchdog,” said Obama. 

The vote took place shortly after 10 a.m. this morning, before the full Senate Banking Committee. Along a party line vote of 12-10 it approved Cordray’s nomination. Although the nomination was sent to the full Senate, Republicans, including the Banking Committee’s ranking Republican Sen. Richard Shelby of Alabama, have vowed to block the nomination unless the president agrees to changes in the structure of the Bureau.

Shelby wants a board to lead the agency instead of a single director. Treasury Secretary Timothy Geithner, who testified before the committee Thursday, urged Republicans to meet with Cordray.  But  Shelby indicated it’s not the nominee that is the problem, it’s the president’s unwillingness to have a dialogue on changing the Bureau.

Geithner called Cordray an exceptionally thoughtful leader. “If the Senate fails to confirm a director for the CFPB, then what will happen is we will leave a vast array of nonbank financial institutions, consumer finance companies, outside the scope of consumer protection,” Geithner told the committee. “Which was exactly the same mistake that left us so vulnerable to the financial crisis we went through.”

 But   Shelby warned that Corday’s nomination is dead until he hears from  Obama. “We’re waiting for that dialogue, and I hope we hear from you,” Shelby told Geithner. “But short of that I think the nominee’s not going anywhere.”

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