By Jeff Mason
WASHINGTON -- President Barack Obama warned the financial industry Monday to stop fighting his administration's reforms to help consumers as he officially announced his pick to head a financial watchdog agency.
Obama chose a compromise candidate to lead the new Consumer Financial Protection Bureau: former Ohio attorney general Richard Cordray, who is not as recognizable as Wall Street critic Elizabeth Warren but who has his own reputation as a consumer advocate.
Cordray's nomination is expected to face tough resistance in the Senate, as Senate Republican leader Mitch McConnell said his party will demand "serious reforms" to the new agency before considering any nominee to head it.
Republicans have focused their attacks on the structure of the agency, created by last year's so-called Dodd-Frank financial reform law. They say it has virtually unchecked power and could restrict banks' ability to lend.
Republicans also are likely to target Cordray's record of suing financial institutions including Bank of America and his strong language condemning bank practices.
Focusing on mortgage lending malpractice, Cordray has referred to the U.S. housing boom that helped cause a deep recession as a "Roman orgy" of debt.
Obama, during a White House ceremony to mark Cordray's nomination Monday, said that there is "an army of lobbyists and lawyers" trying to water down the provisions of financial reform that his administration passed.
"They've already spent tens of millions of dollars this year to try to weaken the laws that are designed to protect consumers, and they've got allies in Congress who are trying to undo the progress that we've made," Obama said.
"We're not going to let that happen," he added. "I will fight any efforts to repeal or undermine the important changes that we passed."
Warren, who helped set up the agency and would have faced a tough if not impossible confirmation battle to head it, stood at Obama's side along with Cordray during the ceremony. Some politicians in Massachusetts think Democrats may recruit her to run against Republican Senator Scott Brown in 2012.
'ACCOUNTABILITY AND TRANSPARENCY'
Obama's fellow Democrats control the Senate, but Republicans could use a procedural move to block a confirmation vote.
McConnell said on the Senate floor that Republicans will not back off their demands for structural changes at the agency.
Republicans have demanded that the agency's leadership be changed to a board instead of a single director, the agency's budget be subject to congressional approval, and other financial regulators have a greater say in the agency's oversight of banks.
"We'll insist on serious reforms to bring accountability and transparency to the agency before we consider any nominee to run it," McConnell said.
White House spokesman Jay Carney said the Senate should and would confirm Cordray.
The agency will open its doors Thursday, the one-year anniversary of Obama's signing of the Dodd-Frank financial oversight law.
The U.S. Chamber of Commerce, a business lobby group, said Cordray would have too much power in his new job.
"The CFPB's structure makes its director one of the most unaccountable officials Washington has ever seen," David Hirschmann, president and CEO of the Chamber's Center for Capital Markets Competitiveness, said in a statement.
"The director is the only Senate-confirmed position at this new federal agency, putting unprecedented powers to regulate a large part of our economy in the hands of a single individual with virtually no checks and balances."
Obama said his reforms would make it easier for consumers to get protection from abusive practices by credit card companies and mortgage lenders.
"For years the job of protecting consumers was divided up in a lot of different agencies," he said.
"We changed that. We cut the bureaucracy and put one consumer watchdog in charge with just one job: looking out for regular people in the financial system."
(Additional reporting by Richard Cowan, Caren Bohan, Patricia Zengerle and Steve Holland; Editing by Will Dunham)
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