After much speculation concerning who would be nominated to head the Consumer Financial Protection Bureau (CFPB), President Obama announced plans to nominate former Ohio Attorney General Richard Cordray for the post at a White House event tomorrow. Mr. Cordray, who is now the CFPB’s top enforcement official, previously clerked for Supreme Court Justices Byron R. White and Anthony M. Kennedy, and was a litigator with the law firm Kirkland & Ellis for over ten years. As Ohio Attorney General, he brought several lawsuits against global banks, mortgage servicers, credit rating agencies, subprime lenders, and other financial institutions.
In a statement, President Obama praised Mr. Cordray’s track record in “advocating for middle class families” and “looking out for ordinary people in our financial system.”
Professor Elizabeth Warren, who for a while had been the frontrunner for the nomination, also received praise from President Obama for devising the idea for the new agency and for getting it off the ground. More recently, President Obama had considered former banker Raj Date as a frontrunner for the position.
Mr. Cordray’s nomination still must clear the hurdle of Senate approval, and Senate Republicans have reiterated their opposition to any nominee so long as the agency’s structure is not modified. Thus, the White House’s plan to obtain Senate confirmation within the next two weeks, before the August 8 planned start of Senate recess, seems unlikely. Senate Republicans may also attempt to prevent the Senate from breaking for recess in the first place in order to preclude President Obama from making a recess appointment. In any event, the agency, which is scheduled to open for business on July 21, is likely to do so without a director and hence will probably be unable to exercise some of its powers.
Over the next few weeks, one can expect a dramatic showdown between President Obama and Senate Republicans, as they escalate the dispute over Mr. Cordray’s candidacy and the structure of the CFPB.