Cordray, a former Ohio attorney general who has been serving as enforcement chief for the bureau -- created under the 2010 Dodd-Frank Financial Reform law -- was nominated by President Obama in July and cleared by the Senate Banking, Housing and Urban Affairs Committee in October. But 44 Republican senators have continued a resistance effort begun last May, vowing to block any nominee until the administration reopens the legislation to give congressional overseers greater checks over the powers of the bureau's director.
"Cordray has spent his career fighting for middle-class families and finding solutions that help consumers, and he has seen bipartisan support from people around the country," said a White House statement released Sunday with the report. "However, some Senate Republicans have vowed to block his nomination without raising questions about his qualifications or background -- and their opposition puts consumers at risk."
President Obama and administration officials are being joined by mayors and state attorneys general for a blitz of media interviews in Alaska, Indiana, Iowa, Maine, Nevada, Tennessee and Utah.
The report "lays out the ways that the CFPB cannot exercise its full authorities to make good on the consumer protection goals in the law unless a director is in place," the White House said. It focuses on the impact of nonbank financial institutions on average Americans.
For example, it notes that while "banks are examined by federal regulators to ensure compliance with federal consumer financial laws (such as the Truth-in-Lending Act), payday lenders are not subject to federal supervision to ensure such compliance. This is especially critical because some studies have found that payday lenders on average charge fees of roughly $16 for a $100 two-week loan. This translates into an annual percentage rate of roughly 400 percent for borrowers often already struggling with debt. The fact that the CFPB cannot currently supervise payday lenders creates a serious regulatory gap that puts consumers at substantial risk."
The report also stresses what the bureau can do for various constituencies. For older Americans, it can educate consumers about abusive financial scams. For students, CFPB can "supervise private student lenders" to help young people avoid taking on more student debt than their job situation allows. For Latinos, many of whom rely on international electronic transfers, or remittances, the bureau can clarify contract terms, the economic council said.
Senate Republicans have shown few signs of backing off their opposition to Cordray's confirmation. Sen. Rob Portman, R-Ohio, said in a statement that he had written to Obama and told Cordray, a fellow Ohioan, directly that "there are serious problems in the current structure of the Consumer Financial Protection Bureau. I have always believed the way to avoid regulatory excess is through accountability, but the CFPB was designed to be entirely unaccountable to the American people. Unfortunately, instead of working with me and other Republicans to reform this new bureaucracy, the White House has stonewalled requests for cooperation, wanting a political showdown more than a way forward."
But Sen. Tim Johnson, D-S.D., chairman of the Banking, Housing and Urban Affairs Committee, defended the bureau. "The misleading claim of no CFPB accountability -- drummed up by special interests and put forth by a vocal minority -- should be exposed for what it is: an attempt to destroy the bureau's ability to do its job of protecting American consumers," Johnson said in a statement to Government Executive. "My Republican colleagues have no good reason to block Mr. Cordray's confirmation, so I hope they do the right thing and vote to protect American families."
On Nov. 15, Sen. Scott Brown, R-Mass., bucked his party and endorsed Cordray. Brown is embroiled in a Senate reelection campaign against Harvard University Law Professor Elizabeth Warren, who was instrumental in setting up CFPB and was long assumed to be Obama's choice to be permanent director.
A poll released Monday by a consumer alliance found that Americans by a 3-1 margin want CFPB "up and running as planned, not diluted by industry's current attempts to weaken its funding and structure." The poll, conducted by Lake Research Partners, was sponsored by AARP, the Center for Responsible Lending and Americans for Financial Reform.
"During the financial crisis," said Nancy LeaMond, executive vice president of AARP, "too many older Americans lost their savings due to the failure of an outdated and compromised financial regulatory system. That's why most Americans say they want clear, accurate information so they can make the best financial decisions for their families, and a watchdog that will protect them from financial abuse."