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February 01, 2013

Head of consumer watchdog bureau faces tough nomination battle

A group of 43 Republican senators sent a letter Friday to President Obama, pledging to oppose the confirmation of any nominee he chooses to head the Consumer Financial Protection Bureau until the watchdog agency changes its leadership structure and submits to more Congressional oversight.

Created by the 2010 Dodd-Frank Act in the aftermath of the Great Recession, the bureau wields regulatory powers over mortgages, credit reporting, debt collection and payday loans, among other consumer financial products and services. It has a budget of $448 million from the Federal Reserve and a staff of about 1,000.

Republicans filibustered Obama's nominee for the post, Richard Cordray, in 2011. In January 2012, the president used a so-called recess appointment to install Cordray as director of the bureau over their objections. He renominated Cordray for the job this month. (Read more about the court case challenging Cordray's leadership here.)

In the letter, the senators said they "have serious concerns about the lack of congressional oversight of the agency and the lack of normal, democratic checks on its sole director."

Authored by Senate Republican Leader Mitch McConnell, R-KY, and Sen. Mike Crapo, R-ID, the letter makes three demands:

 *   Replace the single Director with a board to oversee the Bureau.  This would provide the same checks on the ability for a single person to dominate the Bureau that exist at other independent federal agencies.
 *   Subject the Bureau to the Congressional appropriations process.  This would provide oversight and accountability to the American people on how public money is spent.
 *   Establish a safety-and-soundness check for the prudential financial regulators who oversee the safety and soundness of financial institutions.  This would help ensure that excessive regulations do not needlessly cause bank failures.

Asked about the letter in a briefing with reporters Friday, White House spokesperson Jay Carney said he wasn't aware of it.

"The Consumer Financial Protection Bureau is an important element of Wall Street reform," Carney said. "The president urges the Senate to confirm Richard Cordray to the head of the bureau. As the letter you cited demonstrates, he has substantially -- substantially more than a majority of support within the U.S. Senate. That should surely be enough for confirmation."

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