The Consumer Financial Protection Bureau commenced operations yesterday and President Barack Obama has nominated former Ohio Attorney General Richard Cordray to lead the new agency, the AP reports.
Cordray was nominated over Elizabeth Warren, Harvard professor and key force behind the creation of the agency as part of the The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Warren faced a tough confirmation fight in Congress.
Without a confirmed director, however, the CFPB cannot write or enforce new rules for nonbank financial companies, which made about half of the riskiest sub-prime loans before the financial crisis. The agency was created as the first federal regulator of these companies to prevent them from sidestepping rules that applied to banks.
Republicans have vowed to block any nomination to head the CFPB until its powers are curbed or a board is chosen to run the agency instead of an individual.
“Unless Congress enacts reform, it is only a matter of time before this concentration of power is abused or misused to the detriment of American businesses and consumers,” Sen. Richard Shelby (R-Ala.) wrote in an op-ed to The Wall Street Journal.