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WASHINGTON — Senate Republicans on Thursday beat back President Barack Obama’s pick to head the new Consumer Financial Protection Bureau (CFPB), as the issue has become entangled in the heated political debate leading up to the 2012 election.
The Senate on Thursday voted 53 to 45 against advancing to an up-or-down vote on the nomination of former Ohio Attorney General Richard Cordray to lead the bureau.
That’s seven votes short of the 60 votes needed.
The bureau was created by the 2010 Dodd-Frank financial oversight law to police the market for consumer financial products such as credit cards and mortgages.
Congress, when both chambers were led by Democrats, created the bureau to protect consumers against large banks and lenders who critics charge took advantage of borrowers in the lead-up to the 2007-09 financial crisis.
Republicans argue a new federal agency is not the answer. They say without tighter congressional oversight, the bureau could weigh down the economy with new regulations.
Obama in July nominated Cordray to be the first director of the bureau. Since that time, both parties have sniped at each other over who is really looking out for consumers and who is doing the bidding of their political base.
Democrats have cast Cordray as a man who can stand up for the little guy, as demonstrated by his moves as Ohio attorney general against big banks over their mortgage practices.
Republicans maintain their problem is not with Cordray but with the structure of the bureau.
New Hampshire’s two U.S. senators split their votes, Sen. Jeanne Shaheen supporting Cordray’s nomination and Sen. Kelly Ayotte voting against.
Shaheen, a Democrat, said “For too long Wall Street engaged in reckless behavior that seriously harmed our economy, with little regard for regular Americans struggling to support their families and plan their financial futures.
“The Consumer Financial Protection Bureau will play an important role in protecting consumers and helping families get clear, accurate information that will better enable them to make sound financial decisions about everything from mortgages to credit cards.”
Ayotte, a Republican, was criticized for her vote opposing the new director.
Former New Hampshire House Commerce and Consumer Affairs Committee chair Ed Butler said, “It was just three years ago that reckless and predatory Wall Street practices collapsed the economy and cost us 10 million jobs, millions of homes and trillions of dollars in others’ home equity and retirement values. President Obama nominated former Ohio Attorney General Richard Cordray, who has spent his career fighting for middle class families and finding solutions that help consumers. This is why Democrats, Republicans and the National Association of Attorneys General have all endorsed him. The obstruction of this nomination is unacceptable.”
NHPIRG consumer advocate Addie Shankle said, “It is very unfortunate that Senator Ayotte voted the way she did today, and I ask her to reconsider her support for measures which were proposed by Wall Street insiders and are which weaken the CFPB. These efforts are harmful for any Granite Stater who holds a mortgage or wants to own a home, has student loans, or carries a credit card, and I want to be very clear: Future efforts to chip away at the CFPB and other Wall Street Reforms may win points with Republican congressional leadership in Washington, but they aren’t supported here at home.”
In May, Republicans promised to block the confirmation of any nominee to lead CFPB unless changes are made that they contend will make CFPB more accountable to Congress.
They want the CFPB run by a board, rather than a director, and believe its budget should be approved by Congress. They also advocate giving other regulators more authority to veto its regulations.
Democrats have brushed aside these requests, arguing that Republicans are leveraging the nomination process to weaken the bureau.
“The minority party is distorting the Senate confirmation process, mandated by the Constitution, to rewrite a law against the wishes of the American people,” Senate Banking Committee Chairman Tim Johnson said in a floor speech.
Republicans shot back that the changes they want are modest and that Democrats have made no effort to negotiate with them and set up Thursday’s vote as a political stunt.
“The President knew about these concerns months ago and he chose to dismiss them,” said Senate Republican Leader Mitch McConnell. “And now he’s suddenly making a push to confirm his nominee — because it fits into some picture he wants to paint about who the good guys and the bad guys are in Washington.”
Some of the nation’s best-known companies—including GE, Google and Goldman Sachs—have avoided paying the taxes they owe, costing us $100 billion last year.
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