* Cordray has been heading agency's enforcement division
* Was outspoken bank critic as Ohio attorney general
* Cordray also expected to face Senate confirmation fight
(Adds lobbyist comment, links to factboxes, time of
announcement, meeting with financial regulatory agencies)
By Caren Bohan and Alina Selyukh
WASHINGTON, July 17 President Barack Obama on
Sunday chose former Ohio Attorney General Richard Cordray to
head the new agency charged with protecting U.S. consumers from
abusive mortgage lending practices and hidden credit card
The pick allows Obama to sidestep some of the controversy
he would have faced had he nominated Elizabeth Warren, who is
credited with conceiving the idea for the new consumer agency
but is viewed by many on Wall Street as a foe.
The president is still likely to face a big fight with
Republicans on the pick of Cordray, a close Warren ally who has
a record of cracking down on the financial industry. His
selection requires Senate confirmation.
"He's from the same mold as Elizabeth Warren but he is
easier to get approved," said Matt McCormick, portfolio manager
at Bahl & Gaynor Investment Counsel Inc in Cincinnati, Ohio.
He said Obama was "bowing to the inevitable" in choosing
the lesser-known Cordray over the more controversial Warren.
FACTBOX-Five facts about Cordray [ID:nN1E76G07R]
FACTBOX-Reaction to Obama's pick [ID:nN1E76G07T
Though Obama's fellow Democrats control the Senate,
Republicans could use a procedural move to block a confirmation
vote. An event is planned at the White House on Monday at 1:05
p.m. ET (1705 GMT) to formally roll out Obama's choice.
The Consumer Financial Protection Bureau will open its
doors on Thursday, the one-year anniversary of Obama's signing
of the Dodd-Frank financial oversight law.
Obama will meet on Monday with heads of financial
regulatory agencies to hear updates on the law's
Republicans and the banking industry have disparaged the
consumer agency as an unnecessary layer of regulation that, if
overzealous, could restrict consumer choice and lending.
Senate Republicans signaled on Sunday they would be
reluctant to confirm a new head of the bureau unless their
demands were met for major changes to the agency's structure.
As an adviser to Obama and Treasury Secretary Timothy
Geithner, Warren has led the effort to set up the new agency.
Her outspoken criticism of Wall Street has made her a
lightning rod for conservatives and the industry.
But Warren is a hero to many Democrats and consumer
advocates who were disappointed at Obama's decision not to name
her. She welcomed Cordray's nomination in a statement in which
she called him tough and smart -- "exactly the combination this
new agency needs."
Warren will leave her role in the Obama administration, a
U.S. official said. A professor of law, Warren will return to
Harvard University after helping with the agency's transition,
a person familiar with the matter said.
Some Democrats are urging Warren to challenge Massachusetts
Republican Senator Scott Brown, whose seat is up for
re-election in 2012.
"With her track record of standing up to Wall Street and
fighting for consumers, Elizabeth Warren was the best qualified
to lead this bureau that she conceived," said Stephanie Taylor,
co-founder of the Progressive Change Campaign Committee. She
said she hoped Cordray would continue Warren's legacy.
Cordray -- whom one bank lobbyist called "all the hard edge
and ambition of Warren without the charm" -- is known as a
vocal critic of the banking industry.
"I would not expect a ton of pro-business policies. I would
expect him to be very aggressive," Bahl & Gaynor's McCormick
said about Cordray, who is a five-time champion of the
television game show "Jeopardy," which tests contestants'
In Ohio, Cordray was known as a leader among state
attorneys general in a probe of dubious mortgage foreclosure
practices. He lost his re-election bid last year and in
December, joined Warren's team working on enforcement matters
for the new consumer agency.
In a 2009 interview, Cordray told Reuters it was his duty
as Ohio attorney general to hold Wall Street to account. He
said taxpayers were focused on creating wealth while banks,
brokerages and insurers were trying to shuffle around that
wealth for their own profit.
"It's a badge of honor for us," Cordray said then about his
litigation against major financial firms, including Bank of
Obama views the consumer bureau as one of the most
important parts of the landmark financial regulation law he
signed in the aftermath of the 2007-2009 markets meltdown.
"American families and consumers bore the brunt of the
financial crisis and are still struggling in its aftermath to
find jobs, stay in their homes, and make ends meet," Obama said
in a statement on Sunday. He said Cordray had "spent his career
advocating for middle class families."
In May, 44 Senate Republicans vowed to block confirmation
unless the consumer agency's leadership was changed to a board
instead of a single director and other changes are made.
"Congress raised concerns about the lack of transparency
and accountability, but the Obama administration still hasn't
addressed those concerns," John Ashbrook, a spokesman for
Senate Republican leader Mitch McConnell, said in a statement
after the news broke that Cordray would get the nomination.
(Additional reporting by Dave Clarke and Karey Wutkowski;
Editing by Eric Beech, Vicki Allen and Todd Eastham)