SEC nominee wins praise — but consumer advocate remains stuck

President Obama's pick to lead the Securities and Exchange Commission (SEC) appeared set to cruise to confirmation following a hearing Tuesday — but his nominee to lead the Consumer Financial Protection Bureau (CFPB) remained stuck in a partisan morass.

Mary Jo White, the former federal prosecutor and white-collar defense attorney, received plaudits from both parties during her confirmation hearing before the Senate Banking Committee. Lawmakers hailed her prosecutorial experience as a boon for an SEC that many feel is too soft on Wall Street.

"I'm going to aggressively support your nomination," Sen. Tom Coburn (R-Okla.) said. "The more I find out about you, the more I like you."

Sen. Jon Tester (D-Mont.) noted White previously pursued cases against mob bosses and terrorists, citing that experience as proof she could handle overseeing the financial sector.

"Given the enemies you already have, I don't think you'll be too worried about Wall Street," he said.

Sen. Mike Crapo (R-Idaho), the ranking Republican on the panel, said he had not fully decided but was inclined to support White. Committee Chairman Tim Johnson (D-S.D.) said he would like to schedule a committee vote on the two picks as soon as possible.

White vowed to bring her hard-nose prosecutorial background to the SEC, as members of both parties have openly grumbled about the lack of strict enforcement against Wall Street's bad actors.

"I don't think there's anything more important than vigorous and credible enforcement," White said. "It must be done."

While White appeared set for confirmation, Richard Cordray's fate was less certain. 

The recess-appointed CFPB director, who has been renominated for the position, continued to face staunch Republican opposition to the bureau's structure that threatens his chances of staying on the job past the end of the year, when his current appointment expires.

Republicans are blocking Cordray's nomination as part of a long-standing demand that the bureau's structure be changed. Democrats sought to paint Republicans as obstructionist and sore legislative losers, but there was little indication their opposition would fade.

"Structural and other changes at the agency are areas where I believe we can work together as it will improve the operation of the CFPB and improve accountability," Crapo said.

Republicans are demanding the CFPB's director be replaced with a bipartisan board and have its budget subject to congressional appropriations. They also want to give other regulators more power to veto CFPB rules.

Sen. Elizabeth Warren (D-Mass.), who helped build the CFPB as an adviser to Obama before running for Senate, accused Republicans of wanting to do nothing more than weaken the consumer watchdog.

"I think the delay in getting him confirmed is bad for consumers, it's bad for small banks," she said. "It's bad for anyone trying to offer an honest product in an honest market."

Republican senators largely avoided criticizing Cordray directly — in fact, most thanked him for his outreach and discussions with them. Most questions were directed at White, who was a new face before the committee.

White did face some questions about her time spent as a high-profile defense attorney, particularly whether her prior work representing some major financial institutions and bank executives could result in conflicts of interest. 

White assured lawmakers that she would work diligently with the SEC's ethics team to ensure she did not overstep any boundaries, and that any recusals she would take would fall in line with prior actions from other top SEC officials.

Sen. Sherrod Brown (D-Ohio) came the closest to critiquing White, asking her about the "revolving door" because she has cycled from public service to the private sector and back.

"The American public will be my client [if confirmed], and I will work as zealously as possible on behalf of them," she promised.

Brown and a handful of other members also probed White on a recent controversy of whether some banks are effectively too large to prosecute. Attorney General Eric Holder told senators earlier this month that the Justice Department was grappling with that issue, because criminal charges against a major bank could result in collateral damage to the financial system and economy. The revelation drew fierce criticism from several lawmakers arguing that big banks were "too big to jail."

As a former prosecutor, White said the public interest needs to be a consideration for prosecutors mulling charges, but that does not mean those charges can't be pursued.

The SEC deals exclusively in civil charges, but White vowed that under her watch, there would be "no institution too big to charge."