Consumer bureau 'Stalinistic' - Republican senator

@CNNMoney December 12, 2011: 10:33 AM ET
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Republican Sen. Lindsey Graham called the new Consumer Financial Protection Bureau "Stalinistic" on Sunday.

WASHINGTON (CNNMoney) -- Republican Sen. Lindsey Graham defended his vote to block confirmation of a director to run the Consumer Financial Protection Bureau by comparing it to something out of the reign of Soviet dictator Joseph Stalin.

In an appearance on NBC's Meet the Press, Graham accused the bureau of being "something out of a Stalinist era," because it has no board monitoring it and it doesn't have to go through the congressional appropriation process.

"The reason Republicans don't want to vote for it is we want a board, not one person, making all the regulatory decisions, and there's no oversight under this person," said Graham of South Carolina. "He gets a check from the Federal Reserve -- we want it under the Congress so we can oversee the overseer."

When the Consumer Financial Protection Bureau was created, as a popular part of the Wall Street reforms, Democrats specifically intended the consumer bureau to be an independent agency. That way, the agency wouldn't have to ask Congress for money every year or butt heads with other banking regulators, who spent the years leading up to the financial crisis ignoring consumer complaints.

At the time, three Senate Republicans agreed and voted for it. Now Republicans maintain the bureau is too powerful and refuse to confirm a nominee. Democrats say the bureau has the same checks and balances as other banking regulators who don't have to ask Congress for money.

How the Consumer Bureau affects you

Last week, the fight over confirming former Ohio Attorney General Richard Cordray to be the consumer bureau's first director became the latest in a string of partisan stalemates that have marked this Congress.

President Obama said he would considering sidestepping Congress with a recess appointment.

A so-called recess appointment of Cordray, while Congress isn't in session, would allow him to run the bureau through the end of 2012.

At stake are vast new powers the consumer bureau can't wield without a confirmed director, especially regulating financial products from non-banks, including student loan providers, debt collectors, payday lenders and check cashers.

Without a chief, it also can't regulate mortgage originators and servicers, which played a big role in the financial crisis for providing subprime mortgages to families who couldn't afford them in the years leading up to the financial crisis. To top of page

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