As expected, the Senate Banking Committee approved Richard Cordray on a party line vote today to direct the new Consumer Financial Protection Bureau. It’s a largely symbolic vote because the next step would be a vote by the entire Senate, and 44 Republican senators have said they’ll block the approval of anyone nominated to the director’s position, even as populist discontent against financial institutions is on the rise.
The committee vote to approve Cordray was 12 to 10, with Democrats approving and Republicans voting it down.
With a grassroots stirring of anger against banks taking hold across the country in the form of “Occupy Wall Street” protests, it’s likely that lawmakers who support Cordray and the mission of the CFPB will push their colleagues to accept the former attorney general of Ohio as a leader for the new agency. Treasury Secretary Timothy Geithner is already doing just that. He spoke to the committee on Thursday and pressed them to approve Cordray.
Without the CFPB, he pointed out, numerous companies that provide financial products and services are under no federal regulation at all. This lack of oversight, “was the exactly the same mistake that left us so vulnerable to the financial crisis we went through,” Geithner told committee members.
President Obama has already said he’ll veto GOP-backed legislation that would weaken the CFPB’s powers. A White House blog post this morning also made the case for a fully functioning CFPB. “Without a director, the CFPB will be unable to ensure that banks, debt collectors, private student loan providers and payday loan providers play are properly supervised and that consumers are not put at risk,” it reads.
Richard Cordray was appointed by President Obama to direct the CFPB after Elizabeth Warren, who was instrumental in creating the structure of the agency and was widely considered the top pick to run the Bureau, was vociferously objected to by some lawmakers. Warren has since announced a run for Senate in her home state of Massachusetts.