Senate Panel Approves Nomination for CFPB Director

WASHINGTON — A Senate panel voted along party lines Thursday to advance the nomination of Richard Cordray to be the first director of the Consumer Financial Protection Bureau.

The Senate Banking Committee voted 12-10 to approve Cordray's nomination and send it to the full Senate. Not a single Republican voted for the former Ohio attorney general, who currently serves as the bureau's enforcement chief.

A group of 44 Republicans — enough to filibuster the nomination — have vowed to block the confirmation of any CFPB director until the bureau is led by a five-member board, rather than a single director. They also want to subject the bureau to the appropriations process, and make it easier for a council of regulators to overturn the bureau's rules.

"My request is not radical," Sen. Jerry Moran, R-Kan., said in a prepared statement issued before the vote. "I am simply asking that we increase accountability at the CFPB by restoring the commonsense structure that President Obama originally proposed for the bureaucracy."

Moran, who has sponsored legislation that would implement the changes Republicans are seeking, added, "It is unfortunate that we find ourselves in this position, but I remain hopeful that the administration will act in the best interests of consumers."

Sen. Sherrod Brown, a Democrat from Cordray's home state, said he called the Senate Historian's office prior to the vote. Brown said they told him that never in the nation's history has a nominee been blocked because the minority party opposed the idea of what an agency is supposed to do.

"We've never really seen this before," Brown said.

The committee, which is controlled by Democrats, was expected to approve the nomination. But given the Republican opposition to the bureau's structure — and some say, to its very existence — the nomination is not expected to advance to the Senate floor any time soon.

Until a director is in place, the bureau may enforce existing regulations that it inherited from the other banking regulators, but it may not exercise any new powers, including its authority over non-banks. The bureau has begun supervising banks with more than $10 billion in assets, and has launched an online consumer complaint portal and hotline for credit card complaints.

It has also begun laying the groundwork for future regulations, and has sought feedback on rules that would streamline mortgage disclosure forms, and designate which kinds of non-banks would be subject to supervision. Its Office of Servicemember Affairs has also begun collecting information on products targeted to military families.

During the hearing with Treasury Secretary Timothy Geithner that followed the vote, ranking Republican Sen. Richard Shelby asked why the administration has not responded to the GOP's letter requesting changes to the CFPB's structure.

The ensuing back-and-forth illustrated just how deeply both sides have dug in their heels.

Shelby said that while Republicans do not object to Cordray in particular, they are waiting for a dialogue with the White House about their proposed changes to the CFPB.

"I would just encourage you to reconsider," Geithner told Shelby.

"But we'd hoped that you'd reconsider — you and the president," Shelby responded.

"Short of that, I don't believe we're moving that nomination."

Geithner retorted, "I'm always optimistic."

"Don't get optimistic on that," Shelby shot back.