GOP wants changes in consumer agency
WASHINGTON — Almost every Senate Republican said yesterday that they will vote against any Obama administration choice to head a new agency designed to protect consumers from harmful financial activities unless changes are made in the agency that Republicans say has been given too much power.
“No person should have the unfettered authority presently granted to the director of the Consumer Financial Protection Bureau,’’ 44 GOP senators wrote to President Obama. “Therefore we believe that the Senate should not consider any nominee to be CFPB director until the CFPB is properly reformed.’’
Two Republican senators did not sign the letter, Scott Brown of Massachusetts and Lisa Murkowski of Alaska.
The agency has been a central sore point of the financial overhaul legislation enacted last year to address some of the banking and Wall Street excesses that led to the recession.
The agency opened its doors in July, and Obama has appointed Elizabeth Warren, a Harvard University law professor who was a driving force behind the idea, to lead efforts to get it operating. But Warren would have a difficult time overcoming GOP opposition to win confirmation as director, and Obama has yet to put up a name to head the agency.
The purpose of the new federal watchdog is to protect consumers from problems with mortgages, credit cards, and other financial products, but Republicans contend that both the agency and its director would have too much power.
“The bureau, as currently structured, lacks any semblance of the checks and balances inherent in the Constitution,’’ said Senator Richard Shelby of Alabama, top Republican on the Senate Banking Committee. “Everyone supports consumer protection, but we should never entrust a single person with this much power and public money.’’
The White House rejected that stance, saying consumers were victims of special interests.
“The president believes that American families who were the hardest hit by this financial crisis deserve an independent watchdog to protect consumers and prevent predatory lending and other abuses in the future,’’ White House spokeswoman Amy Brundage said.
Republicans have enough votes to block a nominee.
The senators, in the letter to Obama, sought three changes in the agency’s structure:
■ The director should be replaced with a board of directors to prevent a single person from dominating the actions of the agency.
■ The agency’s spending should be subject to the congressional appropriations process to ensure effective oversight.
■ Federal banking regulators should be given the tools to prevent agency regulations from needlessly causing a bank to fail.