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Senate delays hearing for consumer agency nominee Richard Cordray

August 3, 2011 |  8:17 am

Richard Cordray, nominee to head the Consumer Financial Protection Bureau
This week's scheduled confirmation hearing for Richard Cordray, the nominee to head the Consumer Financial Protection Bureau, has been delayed until September as senators left early for their August recess.

The Senate Banking Committee had planned to hold the hearing Thursday in hopes of advancing the nomination to head the controversial new agency. But the hearing for Cordray, a former Ohio attorney general who has been working as head of enforcement for the CFPB, has been rescheduled for Sept. 6, the committee announced.

The Senate began its break after Tuesday's session in which it approved an increase in the nation's debt ceiling.

The one-month delay in the confirmation hearing will have little effect. Cordray's nomination faces strong resistance from nearly all Senate Republicans, who have promised to block any nominee to head the agency unless President Obama agrees to weaken its power. Obama strongly opposes their demands, which include replacing the powerful director with a bipartisan five-member commission.

And congressional Republicans have again blocked the Senate from going into a formal recess, which would have allowed Obama to temporarily appoint Cordray as agency director -- as well as make a host of other appointments -- without a confirmation vote.

Until the consumer agency has a Senate-confirmed director, or one put in place by a recess appointment, it cannot use some of the authority granted to it by last year's financial reform law.

Those delayed powers include regulation of mortgage brokers, payday lenders and other financial institutions outside the banking system.

The Treasury Department is running the agency until it has a director. Last week, Treasury Secretary Timothy F. Geithner named Raj Date as a special advisor and put him in charge of the agency until a director is in place.

Date, a former financial industry executive who serves as the agency's associate director of research, markets, and regulations, replaces Harvard Law professor Elizabeth Warren.

Warren, who came up with the idea for the agency in 2007, had been working as an administration advisor since September to help launch the CFPB. Despite strong support from liberals, Warren was not nominated by Obama to be the agency's director. She left on Monday to return to teaching at Harvard.

RELATED:

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-- Jim Puzzanghera

Photo: President Obama announces the nomination of Richard Cordray, right, to head the Consumer Financial Protection Bureau. Credit: Associated Press.

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