By Alexander Bolton - 12/08/11 05:52 PM EST
Senate Democrats are urging President Obama to use everything in his power to appoint Richard Cordray to the Consumer Financial Protection Bureau, including a recess appointment.
Republicans blocked Cordray's nomination Thursday after Democrats fell seven votes short of ending a GOP filibuster, with 53 voting to advance the nomination and 47 voting no.
Democrats said the agency tasked with overseeing banks and other financial institutions would be crippled without its head, and urged the president to step in to address the situation.
Obama said at a press conference shortly after the vote that he would consider a recess appointment
“We’re going to look at all our options. My hope and expectation is that the Republicans who blocked this nomination come to their senses,” Obama told reporters.
The consumer bureau has promulgated rules on credit card disclosure but it cannot regulate non-bank lenders such as payday lenders and student loan companies without a director.
Sen. Scott Brown (Mass.), who faces a tough reelection race against Elizabeth Warren, whom many liberals had preferred to head the controversial agency, was the only Republican to vote to bring Cordray’s nomination to a final vote.
Sen. Olympia Snowe (R-Maine) voted “present” and Sen. John Kerry (D-Mass.) did not vote.
Republicans said they did not oppose Cordray, a Democrat and Ohio’s former attorney general, because of objections to him per se, but because of concerns over the structure of the Consumer Financial Protection Bureau.
They want the director to be replaced with a five-person board, give Congress power to approve the agency’s budget and allow financial regulators to provide a check on agency rules so they don’t “imperil the health of financial institutions.”
Republicans argued a financial regulatory czar unaccountable to Congress is not in the best interests of the financial services industry or consumers.
“We’re not going to let the president put another unelected czar in place, unaccountable to the American people. And frankly, his refusal to work with us on this only deepens our concerns,” Senate Republican Leader Mitch McConnell (Ky.) said on the Senate floor before the vote. “The CFPB requires reforms before any nominee can be confirmed.”
Schumer flatly rejected the demands.
“We will never sign onto any attempts to permanently gut this agency, to make the agency respond away from the consumer and toward special interests,” said Schumer. “We will not negotiate with them on any plan to cut this agency off at the knees.
“President Obama should pursue all possible means that are within his power to carry out the work this agency is prevented from doing without a director in place,” he added.
Schumer urged the president to use the Federal Trade Commission and other regulatory agencies, as well as his own administrative powers, to crack down on anti-consumer practices in the financial industry.
Obama said Republicans should propose legislation if they want to change the setup of the Consumer Financial Protection Bureau.
“I know that some of them have made an argument that we just want to sort of make some modifications in the law. Well, they’re free to introduce a bill and get that passed,” said Obama.
Obama said the GOP opposition to Cordray is part of a broader strategy to block his nominees in exchange for policy changes.
“They will hold up nominations, well-qualified judges aren’t getting a vote. I’ve got assistant secretaries to the Treasury who get held up for no reason just because they’re trying to see if they can use that to reverse some sort of law that’s already been passed,” Obama said.