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Obama urges Senate to OK Richard Cordray as financial watchdog

At a news conference, President Obama says Republicans, who are trying to hold up Richard Cordray's nomination to lead the Consumer Financial Protection Bureau, 'want to roll back the whole notion of having a consumer watchdog' for financial products.

October 07, 2011|By Jim Puzzanghera, Los Angeles Times
  • Richard Cordray is President Obama's choice to run the Consumer Financial Protection Bureau.
Richard Cordray is President Obama's choice to run the Consumer Financial… (Joshua Roberts, Bloomberg )

Reporting from Washington — President Obama made a public pitch for the Senate to confirm Richard Cordray to head the new Consumer Financial Protection Bureau and accused Republicans of wanting to roll back key financial reforms that could protect the country from a future crisis.

"He would be America's chief consumer watchdog when it comes to financial products," Obama said at a White House news conference Thursday, touting Cordray's background as former attorney general of Ohio.

"And Republicans have threatened not to confirm him not because of anything he's done, but because they want to roll back the whole notion of having a consumer watchdog," he said.

Obama's comments came shortly after the Senate Banking Committee voted 12 to 10 to approve Cordray's nomination to be the agency's first director. All GOP members voted against the nomination as part of a vow by nearly every Senate Republican to block any nominee to head the agency unless its powers are watered down.

Obama said that threat showed Republicans wanted to go back to the state of regulations before the financial crisis.

"You've got Republican presidential candidates whose main economic policy proposal is 'We'll get rid of the financial reforms that are designed to prevent the abuses that got us into this mess in the first place,'" Obama said.

"That does not make sense to the American people. They are frustrated by it," he said, referring to the ongoing protests against big financial institutions on Wall Street and in cities around the country, including in Southern California.

Testifying before the Senate Banking Committee immediately after its vote, Treasury Secretary Timothy F. Geithner urged Republicans to reconsider Cordray's nomination.

"I think you're going to find he's an exceptionally talented, thoughtful leader [with] an excellent record," Geithner said.

He reminded lawmakers that the agency can't exercise some of its powers without a Senate-confirmed director. For example, the agency won't get new authority over other largely unregulated sectors of the financial services industry, including mortgage brokers, payday lenders and private issuers of student loans.

But Republicans didn't back down.

Sen. Richard Shelby (R-Ala.) said he and his Republican colleagues were seeking only modest changes in the agency's structure. Among them are replacing the director position with a bipartisan commission, subjecting the bureau's funding to annual congressional review and allowing other financial regulators to block the agency's actions more easily.

"The bureau must be fully accountable to the American people," Shelby said. "We are simply seeking common-sense changes."

With 44 Senate Republicans vowing to block the nomination, they have enough to mount a successful filibuster.

The Obama administration strongly opposes the changes, arguing they would substantially weaken the agency's powers. Shelby asked Geithner to reconsider the opposition.

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

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