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Cordray nomination in doubt

By Mark Hamrick · Bankrate.com
Tuesday, March 19, 2013
Posted: 2 pm ET

One of two key appointments for federal regulators still appears troubled after a required committee vote.

The Senate Banking Committee has voted along party lines to approve the nomination of Richard Cordray as director of the Consumer Financial Protection Bureau. The 12-10 vote was supported by Democrats, opposed by Republicans.

Part of a twofer

The vote came as the panel also approved the nomination of former federal prosecutor Mary Jo White to head the Securities and Exchange Commission. In this case, the vote was 20-1.

Said committee Chairman Tim Johnson, D-S.D., "Both candidates are well-qualified for the jobs they've been nominated for."

While White's appointment appears easily headed for approval by the full Senate, the same cannot be said of Cordray.

GOP opposition to Cordray

Republicans continue to look to scuttle Cordray's nomination by criticizing the structure of the agency, created by the Dodd-Frank law emerging from the financial crisis.

Senate Republicans say they want a commission similar to that which governs the Federal Reserve and the Federal Deposit Insurance Corp.

Ranking GOP panel member Mike Crapo, R-Idaho, said issues of transparency and accountability are at stake "regardless of the administration in charge." Crapo said the CFPB has failed to fully explain how $150 million in federal contracts were spent as the agency was gearing up.

Full Senate prospects remain dim

To bring the Cordray vote up for consideration in the Senate, 60 votes are required unless Republicans decline to filibuster, and allow an up-or-down vote. Without some defections among Republicans, support for as much as a vote appears still unlikely.

Sen. Elizabeth Warren, D-Mass., who came up with the idea of the CFPB while she was a professor at Harvard, said in a statement: "I believe it is past time for an up or down vote for Rich Cordray. He has earned a reputation as an effective and balanced regulator, and the Senate needs to focus on how to put an end to practices that cheat families in their mortgages and credit cards -- not how to help the big banks."

Critics of the Cordray nomination have challenged his standing because it was made as a recess appointment by President Barack Obama. A federal appeals court has ruled that similar Obama appointments to the National Labor Relations Board were unconstitutional. Republicans say the Cordray appointment should also be viewed with skepticism because of the NLRB ruling, which is expected to be appealed.

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