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Bypassing Congress, Obama fills consumer post

A slap to GOP, which blocked Cordray vote

Former Ohio Attorney General Richard Cordray spoke at an event in Columbus, Ohio, in 2010.

Mark Duncan/AP/File

Former Ohio Attorney General Richard Cordray spoke at an event in Columbus, Ohio, in 2010.

President Obama, in a politically provocative move that incensed Republican leaders, bypassed the Senate nomination process yesterday and appointed Richard Cordray to lead a contentious financial agency intended to rein in lending abuses and simplify the process for consumers.

“He’ll be in charge of one thing: looking out for the best interests of American consumers,’’ Obama, with Cordray at his side, told a raucous crowd of 1,300 assembled at a high school in Cleveland. “His job will be to protect families like yours from the abuses of the financial industry.’’

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Cordray, whose hometown is Cleveland, had served as Ohio’s attorney general. Just a month ago, Senate Republicans rejected his confirmation to head the Consumer Financial Protection Bureau, with Senator Scott Brown of Massachusetts the lone Republican in favor of the appointment.

The agency was conceived and built by Elizabeth Warren, a Harvard Law professor and expert on the effects of bankruptcy on families. Warren is expected to be the Democratic nominee facing Brown in his reelection bid; it will likely be one of the most watched Senate campaigns in the country in November.

Brown, breaking with party leaders, yesterday defended the president’s decision.

“He is the right person to lead the agency and help protect consumers from fraud and scams,’’ Brown said in a statement. “While I would have strongly preferred that it go through the normal confirmation process, unfortunately the system is completely broken.’’

The decision to install Cordray without Senate approval under the constitutional provision for making appointments when lawmakers are in recess was an audacious opening salvo in Obama’s reelection strategy of demonizing Congress.

The president, announcing his decision before a political rally-like crowd, seemed to welcome a contentious second session of the 112th Congress, in which any attempts at bipartisan compromise appear in danger of being lost in all-out election-year war.

Obama said he had looked for opportunities to work with Congress. But, he said, “I am not going to stand by while a minority in the Senate puts party ideology ahead of the people we were elected to serve.’’

Republicans have contended there is too little oversight over the new agency. They blocked Cordray’s confirmation from being considered by the full Senate. Last month, Democrats mustered a 53-45 vote to do so but failed to win the filibuster-proof threshold of 60 votes to confirm Cordray.

The president portrayed Cordray as his hand-appointed protector of consumers. He wasted no time in painting Republican opposition to Cordray as another sign of the party putting the interests of Wall Street above the concerns of ordinary Americans.

“The only reason Republicans in the Senate have blocked Richard is because they don’t agree with the law that set up a consumer watchdog in the first place,’’ Obama said.

Republicans began attacking the appointment hours before Obama officially announced it, arguing that it was unconstitutional.

“This is an extraordinary and entirely unprecedented power grab by President Obama that defies centuries of practice and the legal advice of his own Justice Department,’’ the House speaker, John A. Boehner, said in a statement.

By blocking Cordray’s appointment, congressional Republicans may have handed Obama another cudgel to hit them with this year, and the White House tried to pick an opportune time to wield it. The appointment seemed deliberately timed, coming a day after the Iowa caucus vote.

The president also used executive authority yesterday to appoint three new members to the National Labor Relations Board.

The Consumer Financial Protection Bureau is a key component of the last year’s Dodd-Frank Wall Street regulatory overhaul.

“Senate Republicans will surely complain about the recess appointment, but their refusal to allow an up or down vote on Cordray’s nomination is just another example of the political games in Washington that must end,’’ Warren said.

Bobby Caina Calvanof the Globe staff contributed to this report. Material from The New York Times was also used.
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