Cordray, formerly the attorney general of Ohio and now the bureau's enforcement chief, was President Obama's nominee to lead the bureau, which now is led by an acting director. Cordray won a majority of Senators, with 53 votes for and 45 against.
But Presidential nominees need 60 votes to win. With votes falling on strict party lines, Cordray failed to clear the supermajority hurdle. Only two Republicans broke ranks, and the backstory behind those votes is telling. Scott Brown of Massachusetts voted with Democrats to end the debate. Brown faces a potentially tough reelection campaign against Elizabeth Warren, who originally created the idea of the bureau, lobbied for its creation and served as the president's assistant in charge of setting it up.
[Read our coverage on the Consumer Financial Protection Bureau]
The other quasi-dissenter was Olympia Snowe, who voted "present." The Maine Republican also faces a tough reelection campaign, a fact that the Obama administration tried to exploit this week by sending officials to Maine to campaign on Cordray's behalf.
Democrats blasted the Republicans for opposing Cordray's nomination.
Sen. Sherrod Brown (D-Ohio) told the L.A. Times that "more than 40 of my colleagues chose Wall Street special interests over Main Street consumers. They should be ashamed of themselves."
Republicans countered that their opposition to a director would remain until President Obama agreed to several changes that would reduce the bureau's power, including replacing its single director with a five-member committee, and giving Congress direct control of its budget.
"This notion that we're against consumer protection, that we're trying to gut the CFPB is just silly," Sen. David Vitter (R-La.) told the L.A. Times. He said the structural changes were intended to limit the bureau's "unbridled, unprecedented authority."
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As long as the CFPB remains without a full-time director, its power to enforce consumer protection laws is significantly limited. Among the things the bureau can't do:
- According to a January report by the Treasury department's inspector general, without a permanent director the bureau is powerless to prohibit "unfair, abusive or deceptive practices."
- The bureau can suggest ways for financial institutions to make their products and contracts more user-friendly, like mortgages and credit card contracts that regular people can actually read. But it can't force the institutions to make those changes.
- The bureau cannot enforce existing laws regulating the following industries:
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