* Nomination hearing scheduled for August 4
* Republicans threaten to block nominee
(Adds Johnson quote and background)
By Dave Clarke
WASHINGTON, July 28 The Senate Banking
Committee will hold a hearing on Aug. 4 on the nomination of
Richard Cordray to lead the new Consumer Financial Protection
Earlier this month President Obama nominated Cordray, a
former Ohio attorney general, to be the bureau's first
Republicans, however, have promised to block Cordray from
being confirmed unless changes are made to the structure of the
bureau that Democrats oppose.
"With next week's hearing, I will begin the process of
moving Mr. Cordray's nomination forward to confirmation,"
Senate Banking Committee Chairman Tim Johnson said in a
statement. "The CFPB opened its doors as an independent agency
on July 21st, and it is off to a strong start promoting an
equitable and transparent consumer financial marketplace.
However, until it has a Director, the CFPB will not be able to
use its full powers to protect consumers and level the playing
field for community banks and credit unions."
Until the agency has a director in place it cannot, for
instance, police non-bank lenders like payday lenders.
Liberal groups and many Democrats were upset that Obama did
not nominate Harvard law school professor Elizabeth Warren for
the director job and are now pushing her to run for the U.S.
Senate in Massachusetts against Republican Scott Brown.
Warren conceived the idea for the agency and has been
setting it up for the administration since last year. She is
leaving the administration on Aug. 1 to return to Harvard.
Before considering any nominee for the fledgling agency
Republicans have demanded that the bureau's leadership be
changed to a board instead of a single director, the agency's
budget be subject to congressional approval, and other
financial regulators have a greater say in the agency's
oversight of banks.
Republicans contend these changes will make it more like
other regulators but Democrats have shot back that it is a
naked attempt to weaken an agency they oppose.
Given the impasse, some Democrats are pushing Obama to
bypass the Senate and appoint Cordray to the job when the
Senate goes on recess -- the next congressional break is
scheduled for August.
The drawback to this approach is he could only hold the job
for about 1-1/2 years as opposed to five.
Supporters have touted the bureau, which will police
products like mortgages and credit cards, as a cop on the beat
who can prevent the type of problems in lending markets that
helped lead to the 2007-2009 financial crisis.
The agency was opposed by the banking industry and many
Republicans who contend it will have virtually unchecked power
and could restrict banks' ability to lend.
(Reporting by Dave Clarke; Editing by Steve Orlofsky, Bernard