GOP blocks finance nominee

WASHINGTON – The battle over the future of a new financial watchdog office escalated Thursday with Senate Republicans blocking confirmation of the man President Barack Obama named to head the office and Obama countering by holding out the possibility of appointing the nominee when Congress is on recess.

Senate Republicans were near unanimous in voting to stop a former Ohio attorney general, Richard Cordray, from becoming director of the Consumer Financial Protection Bureau, an agency they said had too much power and too little accountability.

The vote had immediate consequences. Without a director, the agency designed to shield consumers from the excesses behind the 2008 financial crisis is unable to operate at full strength.

Republicans said that until the Obama administration agrees to changes at the agency, they will keep blocking the president’s pick from taking charge.

Obama said immediately after the vote that there was no reason to deny Cordray the top spot. He did not rule out a recess appointment, whereby a president makes a temporary appointment to a government post when Congress is not in session. Under such a move, an appointee can serve until the close of the next session of Congress, which would be the end of 2012.

Republicans this year have been successful in stopping the White House from making such appointments.

Obama said his message to the Senate was: “We are not giving up on this. We’re going to keep on going at it. We are not going to allow politics as usual on Capitol Hill to stand in the way” of American consumers being protected from unscrupulous financial operators.

Democrats framed the standoff in political terms, saying Republicans wanted to gut an agency created to look out for consumer interests.

“Cordray and consumer protection are being blocked simply because Republicans want to protect Wall Street,” said Sen. Robert Menendez, D-N.J.

The vote to overcome the GOP filibuster was 53-45, seven short of the 60 needed to advance the nomination. One Republican, Sen. Scott Brown of Massachusetts, joined Democrats in support of Cordray. Sen. Olympia Snowe, R-Maine, voted “present.”

While the agency officially began business in July, the deadlock limits what it can do. It can oversee existing bank regulations. But without a director, it cannot issue new rules dealing with entities beyond banks, such as payday lenders, private student loan providers and mortgage servicers that have been the source of predatory lending practices.

The agency was a centerpiece of the financial overhaul bill signed into law last year.

Republicans largely opposed that legislation and have since sought to change some of its provisions.