Obama pledges to fight GOP changes to CFPB
President Obama introduced Richard Cordray Monday as his nominee for director of the Consumer Financial Protection Bureau and rebutted requests for the structural changes to the bureau many Republicans in Congress are calling for. The CFPB opens Thursday as the primary regulator of the entire mortgage industry. It will change how mortgages and other loans are disclosed to consumers and continue enforcement against mortgage servicers started by federal regulators last year. On Monday, Obama nominated Cordray, the former Ohio Attorney General and the bureau's current chief enforcement officer, as director. "He took this job because he believed so deeply in the mission of the bureau," Obama said at a press gathering Monday. "He helped recover billions in pension funds on behalf of retirees and stepped up the state's mortgage lending requirements for consumers." But a group of 44 GOP Senators, led by Rep. Richard Shelby (R-Ala.) sent a letter to Obama in May, refusing to vote for any nominee until structural changes to the agency were made, including approving one bill that would establish a commission, not a director. According to Dodd-Frank, if there is no director by Thursday, the CFPB could lose its supervisory role over payday lenders, debt collectors and nonbank financial institutions. Elizabeth Warren, the architect of the CFPB and special adviser to the president and Treasury Department, said in a Monday morning op-ed that Cordray has a track record for defending consumers and pushed back against efforts from Senate Republicans to defang the bureau. "There's lots of good news, but make no mistake: this agency still has enemies in Washington. And they have a plan," Warren said. "I remain hopeful that those who want to cripple this consumer bureau will think again and remember that the financial crisis — and the recession and job losses that it sparked — began one lousy mortgage at a time." In a statement sent to HousingWire, Shelby said Obama has not addressed Republican demands to restructure the CFPB and he stood by the promise made in the letter. "Until President Obama addresses our concerns by supporting a few reasonable structural changes, we will not confirm anyone to lead it. No accountability, no confirmation," Shelby said. A spokesman for Rep. Randy Neugebauer (R-Texas), who supported the commission bill introduced this year, said the West Texas congressman's concern wasn't with who would run the bureau but with how much power the agency would yield. "It is just problematic because this one person has a huge swath of leeway based on how the agency has been constructed," the Neugebauer spokesman said. Rich Andreano, an attorney on the mortgage department of law firm Patton Boggs, said he doesn't expect any resolution on the Cordray nomination until the fall. Republicans have enough members of Congress pushing against a director for the bureau to filibuster an approval. "I think the really important question here is: What does this nomination get tied to?" Andreano said. "The issue then becomes: When can it finalize rules? If there's not a director at the time a rule is finalized, I could see people going to court over it." Obama once again signaled Monday that he would not bend to the demands. "There's been an effort from banks and lobbyists, who've spent tens of millions of dollars this year to undo the progress that we made. We're not going to let that happen. There were abuses, and there was a lack of strong regulations. We're not going to go back to the status quo," Obama said. "I will fight any efforts to reform the important changes we passed." Write to Jon Prior. Follow him on Twitter @JonAPrior.