Saying he is committed to protecting Americans from the kind of abuses that contributed to the U.S. financial crisis, President Obama on Monday announced his nominee to head a new consumer protection bureau that was created in legislation he signed into law a year ago.
The creation of a Consumer Financial Protection Bureau, or CFPB, was a key part of broad legislation approved by Congress, and was strongly supported by Obama, in response to the U.S. financial crisis.
In nominating Richard Cordray, a former Ohio attorney general with a record of being a tough consumer advocate and a foe of financial fraud, to head the bureau, Obama bypassed Elizabeth Warren, who is credited with the idea for its formation.
Warren ran into trouble on Capitol Hill where key Republicans opposed her support for tough new regulations on the financial industry. She also faced opposition from parts of the U.S. business community.
In the White House Rose Garden, flanked by Warren and Cordray and with Treasury Secretary Timothy Geithner looking on, the president referred to the "very tough" opposition to Warren who he gave responsibility for establishing the CFPB.
Obama said Cordray, who helped set up the enforcement division of the new bureau, is the right person for a job, which the president described as crucial to preventing abuses from resurfacing that were rooted in what he called "lack of smart regulations."
"So we're not just going to shrug our shoulders and hope it doesn't happen again," said President Obama. "We're not going to go back to the status quo where consumers couldn't count on getting protections that they deserved. We're not going to go back to a time when our whole economy was vulnerable to a massive financial crisis."
Although opposition in Congress prevented Elizabeth Warren from heading the new bureau, Cordray's path to nomination is not assured, a fact discussed in Monday's White House news briefing.
Earlier this year, 44 Senate Republicans said they would oppose any nominee Obama sent to Capitol Hill, unless the president ensures there will be significant changes to deal with what they call excessive powers vested in its director.
White House Press Secretary Jay Carney says Americans should take note of what he called "blanket opposition" to the very existence of the new bureau by some Republicans.
"They do not want this agency that is designed precisely to protect consumers, to exist as it now stands," said Carney. "And they have said they would reject or oppose any nominee, which is something, I think, that needs to be explained to the American people because this agency is there to protect them."
In remarks on the Senate floor Monday, Republican Minority Leader Mitch McConnell reiterated key criticisms of the new bureau.
"Without proper oversight, the CFPB will only multiply the kind of countless burdensome regulations that are holding our economy back right now," said McConnell. "And [it] will have countless unintended consequences for individuals and small businesses that constrict credit, stifle growth and destroy jobs."
President Obama's schedule Monday also included closed door discussions with senior administration officials and heads of financial regulatory agencies to update him on implementation of the financial regulatory reform legislation.
In his remarks about the consumer protection bureau, Obama reviewed the key objectives of the broader legislation.
"We passed financial reform a year ago," said Obama. "It was a common sense law that did three things. First, it made taxpayer-funded bailouts illegal, so taxpayers don't have to foot the bill if a big bank goes under. Second, it said to Wall Street firms, 'You can't take the same kind of reckless risks that led to the crisis.' And third, it put in place the stronger - the strongest - consumer protections in history."
Ahead of its first anniversary on July 21, the Dodd-Frank law, named for the former and current Massachusetts lawmakers who steered it through Congress, continues to face opposition from some Republicans who call it a failure, and who have introduced legislation to repeal or modify some of its provisions, and weaken its regulatory powers.