* White, CFPB nominee Cordray face confirmation hearing
* White says expects recusals to be "narrow," will not harm
* Republicans may block Cordray as seek changes to bureau
By Emily Stephenson and Sarah N. Lynch
WASHINGTON, March 12 Mary Jo White, President
Barack Obama's choice to lead the U.S. Securities and Exchange
Commission, told lawmakers that her past legal work for Wall
Street clients would not prevent her from being a tough
White, a former U.S. Attorney for the Southern District of
New York, must step aside from certain work related to clients
in her most recent job as an attorney at Debevoise & Plimpton.
She said she could participate fully in writing rules to
implement the Dodd-Frank financial reform law and other
regulations such as new money-market fund rules, playing down
concerns of possible conflicts of interest.
"The American public will be my client, and I will work as
zealously as possible on behalf of them," White told the Senate
Banking Committee on Tuesday during a hearing focused on her
She appeared alongside Richard Cordray, President Barack
Obama's choice to lead the Consumer Financial Protection Bureau.
White is expected to be easily confirmed by the U.S. Senate.
She received little pushback or sharp questioning from members
of the banking committee.
The committee's Chairman Tim Johnson, a South Dakota
Democrat, told reporters he hopes to hold confirmation votes for
White and Cordray soon but has not set a date. Idaho Senator
Mike Crapo, the top Republican on the committee, said he was not
aware of opposition to White's confirmation.
Cordray's appointment has drawn more opposition from
Republican senators who want changes in the structure of the
consumer bureau before they will vote to approve anyone to head
it. For White, the hearing was the first public opportunity to
discuss her background and views on financial regulation.
Some critics have said problems could arise from her legal
defense work for clients such as JPMorgan, former Bank
of America CEO Ken Lewis, UBS and accounting
giant Deloitte & Touche LLP.
White said the recusals she will face "are not out of the
ordinary" compared with prior SEC chairmen.
"There's no question she is going to sail through. That was
a very smooth hearing, and it appears she is going to be very
aggressive," said Thomas Sporkin, a former top SEC official who
is now in private practice at the law firm BuckleySandler.
He said that while White sounded like she wants to be
tougher on enforcement than previous SEC administrations, it
could prove difficult to go after more individuals in cases of
Wall Street misconduct because of the way big financial
institutions are structured.
White would join the agency as the deeply divided SEC works
through dozens of rules called for by the Dodd-Frank law and the
Jumpstart Our Business Startups (JOBS) Act, a proposal to reform
the $2.6 trillion money market fund industry, and rules to
potentially revamp U.S. equities market structure.
Without a deciding fifth vote, little rulemaking has taken
place since Elisse Walter took over as chairman in December.
Senator Elizabeth Warren, a Massachusetts Democrat who
previously set up the consumer bureau, said the SEC has fallen
behind on writing rules required by Dodd-Frank.
"The consumer agency has met virtually all of its
rule-writing deadlines," Warren said. "The SEC has missed about
half of them so far."
White said completing rule-writing required by Congress
would be among her top priorities and that she would tend to
other initiatives, including new rules for money market funds.
Last year, former SEC Chairman Mary Schapiro sought to
propose money funds rules, but commissioners could not agree on
an approach. The Financial Stability Oversight Council, made up
of the heads of financial regulatory agencies including the SEC,
has since proposed its own money market framework in an effort
to pressure the SEC to act.
White said the SEC should handle any new regulations for the
industry. "It's an investment product, it's where the SEC has
expertise, and I think they should take the lead," White said.
She did not give an opinion on a specific course of action,
saying she had not discussed it with other commissioners.
Writing all the delayed rules quickly could be tricky, said
Dennis Kelleher, president of pro-reform group Better Markets.
"Taking on Wall Street while tackling systemic risk, money
market funds, credit rating agencies, enforcement, Volcker rule,
economic analysis, executive compensation and so much more may
make prosecuting terrorists look easy by comparison," he said.
Cordray's confirmation could be more difficult to secure, as
Republicans have refused to confirm a CFPB director until the
White House agrees to make changes to the bureau's structure.
Republicans on the committee asked Cordray few pointed
questions and focused mostly on White, and many have
complimented him personally. Senator Tom Coburn, an Oklahoma
Republican, said he thought Cordray had "done a wonderful job."
But Republicans say in order to confirm someone, they want
the White House to agree to replace the CFPB's director with a
bipartisan commission and change the way it is funded.
Cordray has led the CFPB in an interim position since
January 2012. Obama used a procedural maneuver known as a
"recess appointment" to install him temporarily and re-nominated
Cordray in January.
Adding to the controversy, a U.S. appeals court ruled
earlier this year that recess appointments to the National Labor
Relations Board made at the same time Cordray was installed were
unconstitutional because lawmakers were not technically in
That ruling has raised questions about Cordray's appointment
Crapo said after the meeting that Republicans and Obama have
not reached an agreement to pave the way for Cordray to be
confirmed but that he thought there could be common ground.
Under Cordray's tenure, the CFPB has worked on an overhaul
of mortgage regulations. It has also taken on debt collectors
and brought several enforcement actions related to credit-card