WASHINGTON — It was a tale of two confirmation hearings.
President Barack Obama’s nominees for two top financial positions testified Tuesday before the Senate Banking Committee: Mary Jo White for chairwoman of the Securities and Exchange Commission and Richard Cordray for director of the Consumer Financial Protection Bureau.
White earned bipartisan praise for her resume as a former prosecutor and corporate attorney, as well as her willingness to crack down on Wall Street. Some Republicans on the panel even announced their support for her nomination during the hearing.
“The more I find out about you, the more I like you,” said Sen. Tom Coburn, R-Okla., who added that he would “aggressively support” White’s nomination to lead the SEC.
However, the panel was clearly divided over Cordray, resurrecting the partisan battle waged during Obama’s first term, when Republicans blocked his nomination. Obama appointed him anyway when the Senate was in recess and nominated him again in January alongside White, calling the pair Wall Street’s “top cops.”
Democrats praised Cordray’s work so far running the CFPB, and some Republicans even said he was doing a good job. His home state ally, Sen. Sherrod Brown, D-Ohio, said the bureau under Cordray has refunded $425 million to fraud victims and handled more than 130,000 consumer complaints.
“As the economy recovers, we want people to know they now have a new agency standing on their side, looking out for their interests, to help restore their confidence in the consumer financial marketplace,” Cordray said. “So far, even though our work is still in its early stages, we have been busy addressing some of the most critical problems.”
Even Republicans concede that the brainy Cordray is a qualified nominee — he is the former attorney general of Ohio and serves as a law clerk for Supreme Court Justice Anthony Kennedy. But the Republicans on the committee strongly oppose the structure of the agency Cordray runs, which was created by the sweeping Dodd-Frank financial reform law passed in 2010.
The GOP believes the consumer watchdog agency, which regulates products ranging from credit cards to home mortgages, should be run by a board instead of a director who wields significant power. Critics also complain that the agency is funded independently by the Federal Reserve Board.
“Unfortunately, the CFPB lacks this transparency and openness regarding its operations, budget and intended mission,” said Sen. Mike Crapo, R-Idaho. “The Dodd-Frank Act specifically elevated the Director of the CFPB so that he or she holds unique power to determine the agency’s budget and mission priorities without any public debate or input from Congress.”
Other Republicans grilled Cordray over whether he would be willing to work with Congress to make changes at the bureau. Republicans blocked his nomination two years ago and their position hasn’t changed, setting up a showdown on the Senate floor where Democrats will need 60 votes to break a filibuster.
White, who has worked for some of Wall Street’s biggest names such as JP Morgan and Deloitte, faced tough questions from Democrats concerned over her ties to firms so powerful that they are “too big to jail.” More liberal members of the panel sought assurances that her connection to corporate America would not impede her ability to police it.
White was also asked about potential conflicts of interest that may force her to recuse herself from enforcement efforts. In a letter to the SEC, she said she would not take part in matters involving former clients for one year after working with those clients, unless the SEC approves it. White also said she would not deal with matters involving clients of the firm where her husband works, Cravath, Swaine & Moore.
White would take the reins of the agency at a time when it is sorting through dozens of rules outlined by the Dodd-Frank law, in addition to regulations that could change the structure of the U.S. equities market.
During her nomination announcement, Obama highlighted her time as a U.S. attorney in Manhattan, where she prosecuted several terrorists, including the ones behind the 1993 World Trade Center bombing. White is expected to easily be confirmed by the U.S. Senate.
