Obama to Bypass Senate and Install CFPB Chief

January 4, 2012

President Obama will use a recess appointment procedure to appoint former Ohio AG Richard Cordray as director of the new Consumer Financial Protection Bureau, according to the Wall Street Journal.

The newspaper reports the President will announce the plan Wednesday in Cordray’s home state at Shaker Heights High School, located outside of Cleveland.

(Related: CFPB is “Stalinist,” Says Top GOP Senator)

Under law, the bureau is unable to operate at full regulatory strength until a director is appointed.

Senate Republicans last month blocked President Obama’s nomination of Cordray to lead the new consumer watchdog agency created by the Dodd-Frank financial overhaul bill in 2010. Democratsneeded 60 votes to prevent a filibuster, but the final tally came to 53-45.

Sen. Scott Brown (R-MA) as expected was the only GOP lawmaker voting in support of Cordray.

Prior to the vote, the White House launched a seven-state campaign in a last-ditch effort to muster support for Cordray. Yet more than 40 Republican Senators have vowed to block any nominee for CFPB director until the agency’s leadership structure is amended.

President Obama issued the following statement following the vote, according to the Boston Globe:

“Consumers across the country understand that part of the reason we got into the financial mess that we did was because regulators were not doing their jobs,” Obama said. “We are not going to allow politics as usual on Capitol Hill to stand in the way ofAmerican consumers being protected by unscrupulous financial operators. Andwe’re going to keep on pushing on this issue.”

Pundits had speculated the President would not use a recess appointment to install Cordray over the holidays while Congress was not formally in full session. Watch the video below for reaction from Obama after GOP lawmakers blocked Cordray’s nomination in December: