Republicans urge hearing for new consumer watchdog

WASHINGTON (Reuters) - The three Republican senators who backed the financial regulatory overhaul urged President Barack Obama not to appoint a new consumer protection watchdog while Congress is in recess.

Senators Olympia Snowe and Susan Collins of Maine and Massachusetts Senator Scott Brown on Thursday called on Obama to follow "regular order" in nominating someone to head the Consumer Financial Protection Bureau (CFPB).

The agency, which will regulate products ranging from credit cards to mortgages, was created in the bill Obama signed into law on Wednesday. The administration considered this one of the most critical parts of the bill but banks fought it bitterly.

"While we have different views of the need for this new agency, as supporters of the legislation that included it we firmly believe that the United States Senate's responsibilities in confirming the head of the CFPB are paramount," the Republican senators wrote in a letter to Obama.

"The role of the CFPB is far too critical to be handled without the advice and consent of the Senate and the full public airing of relevant issues that that entails," the letter said.

The senators made no mention of potential nominees, instead stressing the importance of transparency in the process. A White House spokesman was not immediately available for comment.

Elizabeth Warren, an outspoken consumer rights advocate feared by Wall Street, is among top contenders to head the new agency that will be set up within the Federal Reserve, White House adviser David Axelrod said last week.

Warren is a Harvard Law School professor who has been chairing a congressional panel overseeing the 2008 bank bailout program. She is a strong critic of big banks and is widely opposed by Republicans who tried but failed to block the financial regulatory bill.

Obama said in an interview aired on Friday the administration had not decided who to appoint to head the new agency but he indicated Warren would be involved in the process of creating it.

"We have not made a decision about who we're going to appoint yet," Obama told ABC's "Good Morning America" program. "But here is my guarantee: ... Elizabeth is going to be working with me, working with Tim Geithner, the Treasury secretary, to help in thinking about how we make this consumer agency as effective as possible."

In recent months, Obama has used so-called recess appointments to sidestep Republican opposition to nominees for senior posts that require Senate approval. The vacancies were filled while the Senate was in recess.

The Senate is in session for two more week before its next recess.

(Reporting by JoAnne Allen; editing by Phil Barbara and Bill Trott)