Obama Bumps Warren, Taps Cordray for CFPB

Serving up a blow to liberal supporters, the Obama administration announced Sunday that it would withdraw ""Treasury Department"":http://www.treasury.gov/Pages/default.aspx adviser Elizabeth Warren for the top post at the ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov/ (CFPB) and replace her with former Ohio attorney general Richard Cordray just days ahead of the agency launch date. Some say the move gives the consumer financial protection advocate the flexibility to make a Senate run in Massachusetts.

According to a ""statement"":http://www.whitehouse.gov/the-press-office/2011/07/17/president-obama-announces-richard-cordray-director-consumer-financial-pr, ""President Barack Obama"":http://www.whitehouse.gov/administration/president-obama will nominate Cordray today at the ""White House"":http://www.whitehouse.gov. Among the deputies handpicked by Warren to help her head up the ""CFPB"":http://www.consumerfinance.gov/, Cordray was set to preside over the bureau's enforcement division.

Writing an article published by ""_The Huffington Post_"":http://www.huffingtonpost.com/elizabeth-warren/richard-cordray-cfpb-consumer-financial-_b_901370.html, Warren said that Cordray ""has always had my strong support because he is tough and he is smart-and that's exactly the combination this new agency needs. He was one of the first senior leaders I recruited for the agency, and his work and commitment have made it clear that he will make a stellar director.""

Cordray previously served as attorney general of Ohio from 2009 onward. According to the ""White House"":http://www.whitehouse.gov, he played a pivotal role in winning more than $2 billion in settlements against financial institutions and stanching foreclosure processes across the state. No stranger to national attention, Cordray previously argued cases before the Supreme Court.

Warren's withdrawal comes after several months she spent in a high-profile confirmation process delayed by Republican opponents. In his statement, Obama thanked Warren ""not only for her extraordinary work standing up the new agency over the past year, but also for her many years of impassioned leadership"" on behalf of consumer financial law.

""This agency was Elizabeth's idea, and through sheer force of will, intelligence, and a bottomless well of energy, she has made, and will continue to make, a profound and positive difference for our country,"" the president said in the statement.

The decision to nudge aside Warren arrives after months of speculation, fueled in part by fierce division among lawmakers on Capitol Hill and fighting by turns left and right over the bureau's sweeping scope of authority, which includes mortgage lenders and servicers. The statement came as a surprise to many who felt that ""CFPB"":http://www.consumerfinance.gov/ associate director and ex-banker Raj Date would succeed the embattled nominee, as ""_Bloomberg News_"":http://www.bloomberg.com/news/2011-07-15/obama-eliminates-warren-as-consumer-head.html reported over the past several months.

Asked what Cordray's nomination would mean for the ""CFPB"":http://www.consumerfinance.gov/, Mark Calabria, director of financial regulation studies at the conservative-leaning ""Cato Institute"":http://www.cato.org/, says that the former Ohio attorney general would ""not run this any differently than she [Warren] would, and if anything, he├â┬ó├óÔÇÜ┬¼├óÔÇ×┬óll be more tied to the litigation industry.""

Despite fielding a new nominee, the ""White House"":http://www.whitehouse.gov will likely continue to struggle with a tied-up confirmation process, which Republicans hope will prevent a nominee -- any nominee -- from receiving the votes necessary to take over as bureau director.

Inking their signatures to a ""letter"":http://cdn.theatlantic.com/static/mt/assets/business/44%20Senators.pdf sent to Obama in May, 44 Republican senators, including Republican minority leader ""Sen. Mitch McConnell"":http://mcconnell.senate.gov/public/ (R-Kentucky), refused to ""support the consideration of any nominee, regardless of party affiliation, to be the ""CFPB"":http://www.consumerfinance.gov/ director until the structure of the ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov/ is reformed.""

Among the proposed changes, Republicans want to replace the directorship with a board of directors and rope the ""CFPB"":http://www.consumerfinance.gov/ into the same appropriations process for the ""Securities and Exchange Commission"":http://www.sec.gov/. According to the letter, Senate Republicans also want to tuck a so-called ""safety-and-soundness check"" into the bureau.

""Sen. Richard Shelby"":http://shelby.senate.gov/public/ confirmed Republican opposition Sunday, saying in a statement that ""[u]ntil President Obama addresses our concerns by supporting a few reasonable structural changes, we will not confirm anyone to lead it. No accountability, no confirmation.""

Richard Eskow, a senior fellow at the left-leaning ""Campaign for America's Future"":http://www.ourfuture.org/, called arguments from the Republican opposition ""transparently artificial,"" claiming ""[t]he CFPB has more checks on its authority than most agencies, yet they accuse it of being all-powerful.""

Until the Senate confirms Cordray or another nominee, the ""CFPB"":http://www.consumerfinance.gov/ will remain under the purview of ""Treasury"":http://www.treasury.gov/Pages/default.aspx, where it will only exercise rule-making authority for the 18 enumerated consumer financial protection laws and more than 40 rules it receives from seven regulatory agencies on Thursday. Without a director, the bureau will be unable to supervise mortgage brokers and nonbank institutions.

Writing for ""_The American Prospect_"":http://blog.prospect.org/robert_kuttner/2011/07/senator-warren.html, Robert Kuttner called Cordray's views ""the same as Warren's,"" nonetheless describing the new ""CFPB"":http://www.consumerfinance.gov/ nominee as someone who ""will not be as effective in going over the heads of financial elites to move public opinion.""

For Calabria, the move by Obama to nominate Cordray is less straightforward than either Kuttner or the White House statement would claim. He suggests that the Obama administration may try to bypass the 44-member opposition by approving Cordray with a recess appointment come August.

""Republicans aren├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ót going to change their position, and they├â┬ó├óÔÇÜ┬¼├óÔÇ×┬óre not going to support this guy,"" he says.

Then again, he says, the White House may have nominated Cordray in order to boost the former state representative's national profile. Calabria cites Cordray's decision to hold off on moving to Washington, D.C. -- something he calls a telltale sign for electoral ambitions back in the Buckeye State.

Cordray isn't the only nominee with his sights on higher office.

According to Kuttner, Warren's withdrawal will not reduce her national profile. ""_The Prospect_"":http://blog.prospect.org/robert_kuttner/2011/07/senator-warren.html co-founder cited news reports and sources suggesting that campaign staffers in Massachusetts may still back Warren for a Senate run against ""Sen. Scott Brown"":http://scottbrown.senate.gov/public/ (R-Massachusetts).

A spokesperson for the ""Democratic Party of Massachusetts"":http://www.massdems.org/contact/contact.cfm could not immediately respond to questions. He said he had to field speculation from reporters across the country with news that Obama would withdraw Warren as ""CFPB"":http://www.consumerfinance.gov/ nominee.

If Warren enters the Democratic primary, Calabria says, ""she├â┬ó├óÔÇÜ┬¼├óÔÇ×┬óll certainly be able to raise money in a way no one else could on the left. Fifty-fifty she├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós going to run for the Senate.""

And if Cordray makes it to his new post as ""CFPB"":http://www.consumerfinance.gov director?

""If one is in the banking industry, this guy is as much a reason to fear as she was,"" he adds.