The Senate Banking Committee voted 12-10 to approve Richard Cordray’s nomination to be the first director of the CFPB. Cordray is a former Ohio attorney general who currently leads the Bureau’s enforcement division. The committee voted along party lines, with no Republican committee member voting to approve the nomination. Cordray’s nomination now proceeds to the full Senate for a vote.
Due to continuing Republican opposition to the CFPB, there are strong indications that Cordray’s nomination will face difficulties in the full Senate. Led by Sen. Richard Shelby (R-AL), a group of 44 Republicans—enough to filibuster the nomination—sent President Obama a letter in May vowing to block the Senate from voting on Cordray or any nominee unless significant structural changes are made to the CFPB, diluting its powers. The group has continually called for the Bureau to be led by a bipartisan five-member board rather than a single director. They also want the Bureau’s funding to be subjected to the congressional appropriations process and to make it easier for other financial regulators to more easily block the Bureau’s actions.
Treasury Secretary Tim Geithner has urged Republicans to reconsider the nomination, reminding them that the agency cannot exercise some of its powers without a Senate-confirmed director. Until a director is in place, the Bureau may not exercise any new powers. In the meantime, the Bureau may enforce existing regulations inherited from other banking regulators. The Bureau has also begun laying the groundwork for future regulations, including seeking feedback on proposed new rules. President Obama has also called for Republicans to support Cordray’s nomination to be “America’s chief consumer watchdog” and accused Republicans of wanting to roll back financial reforms that could protect the country from a future crisis.
Still, Republican resistance to confirming Cordray or any other nominee as director of the CFPB remains steadfast. Due to the solid Republican opposition, the nomination is not expected to advance to the full Senate anytime soon.