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CFPB remains headless, for now

By Marcie Geffner · Bankrate.com
Thursday, August 4, 2011
Posted: 10 am ET

The federal Consumer Financial Protection Bureau, or CFPB, is officially up and running -- but still without a director, a vacancy that limits some of the agency's enforcement authority.

The Senate Banking Committee had scheduled a hearing the first week of August to consider President Barack Obama's nomination of Richard Cordray for the position, but the committee then adjorned for the day -- and the August recess -- without moving forward on the matter. Instead, the hearing was postponed until Sept. 6, according to the Dodd-Frank tracker website run by the American Bankers Association, or ABA.

Consumers groups have supported the nomination, but 44 senators have vowed not to install him -- or anyone else -- in the post. Instead, they want the CFPB to be run by a board of many, rather than one director. They also want the agency to be subject to the Congressional appropriations process, among other demands.

The postponement of the hearing is a loss for consumers since the CFPB won't be fully operational in its declared role as the "new cop on the beat," looking out for their interests in financial services, until a director is in place.

That said, the hearing wasn't likely to accomplish much as long as the boycott of sorts against any nominee as chief consumer protection cop remains in effect.

What's more, the U.S. House of Representatives has found a way to make sure the president won't be able to appoint Cordray or any other nominee during the recess, an option that would have avoided any hearings.

The House accomplished this objective through an announcement that it will hold "pro-forma" sessions throughout August in what the ABA website called "a procedural move" that will force the Senate to hold these sessions as well.

Cordray, a former Ohio state attorney general, is currently chief of enforcement at the CFPB.

So far, he's the only witness scheduled to testify at the Sept. 6 hearing, according to the announcement on the Senate committee's website. But as the website notes, "additional nominees may be added at a later date."

Follow me on Twitter: @marciegeff

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