Obama renews push for consumer bureau chief

@CNNMoney December 1, 2011: 7:07 PM ET

WASHINGTON (CNNMoney) -- The Obama Administration is renewing its push for the Senate to confirm a director to run the Consumer Financial Protection Bureau.

"The longer we wait to confirm a director, the more we're leaving millions of Americans who aren't doing business with banks vulnerable to the kind of predation and abuse that caused so much damage in this crisis," said Treasury Secretary Tim Geithner at a press conference Thursday.

"Our strategy is to make the case as compelling as we can," said Geithner at the event, which he called to focus attention on the issue.

It may be an exercise in futility. Senate Republicans have said they'll maintain a block on the confirmation until Democrats yield to their demands for changes to the structure of the consumer bureau.

In May, Senate Republicans sent a letter to the White House insisting on three big changes to the Consumer Financial Protection Bureau: to replace the director with a board, to make the bureau ask Congress for money each year, and to prevent the bureau from making rules that could threaten the health of financial institutions.

The only Senate Republican who supports confirming a director for the bureau is Sen. Scott Brown of Massachusetts.

The Consumer Financial Protection Bureau (CFPB) is an independent watchdog agency tasked with regulating financial products such as mortgages and credit cards.

But without a director, the bureau can't wield some of its most important powers, like regulating financial industries that now operate in the shadows, such as payday lenders and mortgage servicers. The consumer bureau also won't be able to declare specific banking or credit card fees deceptive or abusive and ban them.

In July, President Obama bypassed Elizabeth Warren to nominate Richard Cordray, a former Ohio attorney general, to run the CFPB.

At an October Senate hearing, Republicans pressed Geithner to respond to their requests. At the time, Geithner made it clear that the Administration wouldn't consider changes to the consumer bureau.

Geithner reiterated that position Thursday, saying "we don't see a case" for changing the checks and balances Congress put in place when they passed Wall Street reforms in 2010.

The White House's renewed push for a director is a "political exercise," said Jaret Seiberg, a senior policy analyst at the Washington Research Group.

"At worst, Democrats will get to accuse Republicans of hobbling the agency designed to protect consumers," he wrote in a research note. "If Republicans buckle, they get Cordray running CFPB. Either way, it is a political win."

Even one of the authors of the Dodd-Frank Act, which created the consumer bureau, said he didn't expect the bureau to get a confirmed director before the 2012 elections.

"I think it depends on the next election," said Rep. Barney Frank, a Massachusetts Democrat, at a conference Thursday sponsored by the Consumer Federation of America. "I don't see that deadlock being broken."

Frank also said in his speech that making the consumer bureau's new powers dependent on Senate confirmation of a director was one of his few regrets in crafting Wall Street reforms. "But that was the Senate's effort to protect its prerogative" to confirm, Frank said. To top of page

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