White House, Heller spar over consumer bureau


WASHINGTON -- The White House is pressuring a group of Republican senators, including Dean Heller of Nevada, as it tries to ramp up a new federal consumer protection agency.

The Senate has set a vote Thursday to confirm former Ohio Attorney General Richard Cordray as director of the Consumer Financial Protection Bureau, one of the components of the Dodd-Frank law that was enacted last year to reform Wall Street practices.

The bureau opened in July but is unable to fully carry out its job without a director, White House officials said.

The agency is unable to fully supervise nonbank financial services such as payday lenders, nonbank mortgage companies, debt collectors, credit reporting agencies and private student lenders, the officials said.

They estimated that 20 million individuals use payday lenders, more than 4 million have used prepaid cards, and more than 14 percent of consumers have debts in collection. Nearly all adults who apply for mortgages, car loans and credit cards rely on credit agencies to get their histories right.

"These institutions affect the daily livelihood of tens of millions of Americans," Brian Deese, deputy director of the National Economic Council, said Monday. "Without a director to the agency, you don't have a cop on the beat looking at these institutions and taking steps on behalf of consumers."

Heller and 44 other Republican senators have signed a letter saying they will not vote for a director until the consumer agency is restructured. The Dodd-Frank law gives the director too much power over a key segment of the economy and Congress not enough authority to set the agency's annual budget, they said.

Cordray needs 60 votes to win confirmation, meaning Democrats who control 53 votes need seven Republicans to join them in breaking a filibuster. Only one -- Sen. Scott Brown of Massachusetts -- has said he would.

Heller does not plan to vote for Cordray, spokesman Stewart Bybee said.

The Nevadan met with the nominee, "and they had a good discussion," Bybee said. The problem is not Cordray but how the consumer agency was put together, he said.

"It doesn't matter if this was a Democratic or a Republican administration, this agency needs reform," Bybee said. "This agency has no measure of accountability."

The White House this week is targeting seven states -- Nevada, Alaska, Indiana, Iowa, Maine, Tennessee and Utah -- for a media blitz aimed at pressuring 11 Republican senators before the vote.

Obama also will deliver a speech in Kansas today that will include a call for Cordray to be installed.

If Cordray is not confirmed, "it's really only because nine or 10 Republican senators refuse to stand up for consumers," White House senior adviser David Plouffe said.

Local and state officials in the targeted states will talk up the importance of the agency, and Obama will conduct interviews with local television anchors, officials said.

Republicans have denounced the Dodd-Frank law as a federal overreach that will kill jobs. All but six GOP lawmakers in the House and Senate voted against the bill, and legislation has been introduced to repeal it although there has been little action on that front.

Meeting with reporters, Plouffe said that rolling back Dodd-Frank is a key part of Republicans' economic strategy, but that in the meantime, it should be allowed to work.

"It is law, so we need to stand it up in the way that is most effective," he said.

Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com or 202-783-1760.

 

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