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Cordray Gets Stiff Reception from Lawmakers, Analysts

Following his nomination Monday, lawmakers and trade associations continue to greet ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov/ (CFPB) director-nominee Richard Cordray stiffly, with spokespeople accepting his new role lukewarmly and officials vowing once more to stall the confirmation process for any nominee that ""President Barack Obama"":http://www.whitehouse.gov/administration/president-obama puts forward.


""Sen. Jerry Morgan"":http://moran.senate.gov/public/ (R-Kansas), one of the 44 authors of a May letter to the president that held he and his colleagues would never confirm a director, issued a statement Sunday reasserting his beliefs on the subject.

""Today's announcement, nearly 12 months after the President created this new agency, does nothing to increase transparency or accountability,"" ""Sen. Moran"":http://moran.senate.gov/public/ said in the statement. ""I along with 43 of my Senate colleagues have made our intentions quite clear, but the Administration has yet to respond to our May 5th letter calling for the ""Bureau's"":http://www.consumerfinance.gov/ leadership structure to be strengthened. I fear today's decision is just the beginning of an end-run around Congress.

""I would urge the President to put the best interests of consumers ahead of politics and seriously consider my proposal,"" he added.

""Sen. Moran"":http://moran.senate.gov/ introduced the Responsible Consumer Financial Protection Regulations Act, the law that would transform the single-person directorship into a board of directors and rope the ""CFPB"":http://www.consumerfinance.gov into the federal appropriations process ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô one that critics contend would allow Congress to strip the bureau of its funding.

""_Bloomberg News_"":http://www.bloomberg.com/news/2011-07-19/republicans-take-aim-at-cfpb-call-nominee-dead-on-arrival-2-.html reports that ""Rep. Spencer Bachus"":http://bachus.house.gov/ (R-Alabama), the bill's sponsor and ""House Financial Services Committee"":http://financialservices.house.gov/ chairman, played down the Republican opposition as one of oversight.

""Is payback a proper function of legislation?"" the news service reports ""Bachus"":http://bachus.house.gov/ as saying of the Dodd-Frank Act to a throng of reporters. ""Consumers were abused by financial institutions in a number of ways, but is it proper to undermine the safety and soundness of financial institutions, or is it proper to find a middle ground where consumers are protected in a way that's not inconsistent with safety and soundness?""

Not everyone felt surprised by the shake-up that booted ""CFPB"":http://www.consumerfinance.gov architect Elizabeth Warren.

""Republicans have already said they'd block a vote on him unless the bureau's essentially gutted,"" says Richard Eskow, a senior fellow at the left-leaning ""Campaign for America's Future"":http://www.ourfuture.org/.


He says the real question is ""Will Cordray run the bureau on an interim basis in the meantime? He would have limited authority but could still serve an important role.""

Without a director, the ""CFPB"":http://www.consumerfinance.gov will stay at the ""Treasury Department"":http://www.treasury.gov/Pages/default.aspx instead of relocating to the ""Federal Reserve"":http://www.federalreserve.gov/. That punts the ball to ""Treasury"":http://www.treasury.gov/Pages/default.aspx Secretary Timothy Geithner, in whose office the Dodd-Frank Act vests the authority to name a special adviser and interim director.

""Republicans are so opposed to her [Warren's] confirmation because bank lobbyists are so opposed to her confirmation,"" he said. In the e-mail, Eskow called Republican arguments ""transparently artificial,"" attributing their stiff reception of any nominee to big business and banking industry connections.

A spokesperson for the ""American Bankers Association"":http://www.aba.com/default.htm (ABA), a critic of the ""CFPB"":http://www.consumerfinance.gov/, declined to comment.

In testimony before the ""Senate Banking Committee"":http://banking.senate.gov/public/ in July, ""ABA's"":http://www.aba.com/default.htm chairman-elect, Albert Kelly, Jr., chairman and CEO of Oklahoma-based ""SpiritBank"":http://www.spiritbank.com/Our-Products/, said that "" ""ABA"":http://www.aba.com/default.htm supports the creation of a board or commission that would be responsible for the ""Bureau's"":http://www.consumerfinance.gov actions rather than giving the head of the Bureau sole authority to make decisions that could fundamentally alter the financial choices available for customers. It also provides the needed balance and appropriate checks in the exercise of the ""Bureau's"":http://www.consumerfinance.gov significant authority. We urge the Congress to pass statutory provisions that ensure such accountability before the ""Bureau"":http://www.consumerfinance.gov is established with a single director.""

In a statement, Chris Stinebert, president and CEO of the ""American Financial Services Association"":http://www.afsaonline.org/, said he ""welcomes ""President Obama's"":http://www.whitehouse.gov/administration/president-obama nomination of a director for the ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov. The nomination of Richard Cordray answers one of the top questions surrounding this powerful new agency, but much uncertainty looms with the transfer date a few days away.

""We hope that Cordray will strive to provide regulatory certainty to an economy that is in dire need of it,"" Stinebert added.

Other analysts think lightly of Cordray's seriousness as a nominee for the ""CFPB"":http://www.consumerfinance.gov, and for much less than his views on consumer financial protection.

In an interview with _MReport_, Mark Calabria, a senior financial analyst at the conservative-leaning ""Cato Institute"":http://www.cato.org/, colored Cordray's nomination and Warren's withdrawal as a thinly veiled attempt by the Obama administration to pocket the former in a recess appointment.

He also suggested the Obama administration may have made the Cordray-Warren switch to help the former Ohio attorney general secure reelection in his home state.

""I would be concerned that this guy is going to go along the path of making this agency a close partner to the litigation industry,"" says Calabria. ""If one is in the banking industry, this guy is as much a reason to fear as she was.""

Cordray's nomination moves forward as the ""CFPB"":http://www.consumerfinance.gov prepares to launch tomorrow.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.

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