White House urges Sens. Orrin Hatch, Mike Lee to back finance agency nominee
Washington • The White House on Monday called out Sens. Orrin Hatch and Mike Lee to either support the director of a financial watchdog agency or leave consumers vulnerable to under-regulated loans and predatory practices.
Meeting with a small group of reporters, White House senior adviser David Plouffe said that Republicans, including Hatch and Lee, should back a nominee to head the Consumer Financial Protection Bureau to help curb potentially abusive practices, some of which led to the 2008 economic meltdown and some that may still snag consumers squarely in their wallets.
"It's really a question about, as they sit down and make a decision, who are they thinking about?" Plouffe said of Hatch and Lee. "If they're thinking about the average person in Utah who needs protection and information in terms of their mortgages, payday lenders and other consumer information, then they'll make the right decision."
Hatch and Lee have already said they oppose the nomination of former Ohio Attorney General Richard Cordray to head the agency created out of the Wall Street reform legislation. The Utah senators don't oppose Cordray personally, but plan to block his nomination as a protest against the agency they say will put Washington bureaucrats in charge of consumers' choices and stifle the economy.
"My opposition to the nomination has nothing to do with the person, but rather to the lack of accountability of the position and the new agency as it's currently structured," Hatch said in a statement.
The new agency has ramped up since Congress approved it last year, but without a director, the oversight it can offer is limited. The actions of payday lenders, credit reporting companies and private student loan firms, for example, are off the table for the Consumer Financial Protection Bureau until a director is confirmed.
The Senate is expected to vote Thursday on Cordray's nomination and the White House has launched a full-court press to round up votes and ensure Americans know what's at stake. The outreach includes potential presidential interviews with local television anchors in several states, including Utah, as well as roundtables with Washington correspondents from areas the Obama administration is targeting.
"This shouldn't be an Obama thing," Plouffe told eight reporters, including one from The Salt Lake Tribune. "This should be an American thing."
White House officials laid out their case in a new report that details the non-banking institutions' impact on Americans' lives. Some 200 million Americans, for example, rely on credit-reporting agencies but there can be wide differences between what those non-federal agencies report back to consumers and what they give to lenders.
The debt-collecting industry, the report adds, deals with about $1.2 trillion in consumer debt but Americans often lack the resources to protect themselves from predatory collection efforts.
"Without a director, Americans will not be protected from falling prey to many of the harmful practices that contributed to the worst financial crisis since the Great Depression," the report says.
Hatch and Lee were two of 43 senators who signed a letter objecting to the new agency, arguing that "far too much power" will be vested in the director without "any meaningful checks and balances" and suggesting that a commission overseeing the agency would be better.
Plouffe, along with Brian Deese, deputy director of the National Economic Council, countered that the federal government's other regulatory agencies are headed by directors and that allows for effective oversight.
Plus, Plouffe added, more than half the nation's attorneys generals have backed Cordray's confirmation, including Utah Attorney General Mark Shurtleff, a Republican.
The White House effort may change some minds in the Senate, though it appeared that Utah's members were digging in against the confirmation.
Lee spokesman Brian Phillips said his boss still opposes Cordray and that what the average Utahn really wants is economic growth, lower taxes and regulatory certainty.
"What they do not need is another un-elected bureaucracy taking away consumer choices and making it more difficult for American businesses to create jobs," Phillips said.