Business | Banking

Republicans vow to block consumer office nominee

Stance renews three-year-old fight over bank oversight

  • AP
  • Published: 16:16 February 2, 2013
  • Gulf News

Washington: Renewing a three-year-old fight over bank oversight, senate Republicans said that they will oppose president Barack Obama’s nominee to head the Consumer Financial Protection Bureau (CFPB) unless the office created after the 2008 Wall Street financial meltdown is significantly changed.

Obama has renominated current director Richard Cordray, who had been named in a recess appointment last year.

Senate Republican leader Mitch McConnell and 42 other senators from the party sent a letter on Friday to Obama saying the consumer office has little accountability to congress and wields too much regulatory authority. They said they will oppose any nominee, no matter his or her party affiliation.

“Far too much power is vested in the sole CFPB director without any meaningful checks and balances,” the letter from the senators said.

The letter represents the most direct threat to an Obama nomination this year. With unified Republican opposition, Democrats would be unable to get the necessary 60 votes to overcome procedural obstacles to confirm a nominee.

White House press secretary Jay Carney said: “It is most unfortunate the US senate continues to oppose implementation of Wall Street reform that was designed entirely to protect the American taxpayer from the kind of crisis that we saw engendered by the collapse of our financial sector in 2007 and 2008.”

Cordray, a former Ohio attorney general, faced the same opposition when Obama nominated him for the job in 2011. His January 4, 2012, recess appointment is now under court challenge. Obama appointed Cordray last year on the same day he placed three members on the National Labor Relations Board, whose appointments were ruled unconstitutional by a federal appeals court last month. A ruling on Cordray’s recess appointment is pending.

The CFPB was a key feature of the overhaul of financial regulations that congress approved and Obama signed in 2010. Republicans, however, objected to the law in general and to the consumer office in particular.

They have demanded that a bipartisan board of directors oversee the office and that it be subject to annual congressional appropriations instead of direct funding from the Federal Reserve.

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