Regulatory: Nomination for director of CFPB blocked

Politics are preventing progress in the consumer financial services industry.

This column is part a series of articles on the new Consumer Financial Protection Bureau and the upcoming wave of regulations affecting the consumer financial industry.

The 44 Senate Republicans who vowed to block President Obama’s nominee to head the Consumer Financial Protection Bureau have succeeded. Last week, a majority of senators voted in favor of approving former Ohio Attorney General Richard Cordray as the new director of the Bureau. Approval, though, required 60 votes in favor of the nominee and Democrats were only able to secure 53.

Step back for a minute. What happens when you know something is coming but that is all you know? No one tells you what is coming. No one tells you when it is coming. You are simply told that it is coming. Sounds a little like the plot line to a mediocre horror flick, right? For financial services companies and their customers—the very consumers the Dodd-Frank Act and the Bureau were meant to protect—this Washington-imposed gridlock is its own version of a horror show.

Credit is not flowing as freely as it did before. Credit product development has been stifled and there are many reasons why. Among those reasons is the uncertainty brought about by the Washington-imposed paralysis over the Bureau. Everyone knows there are new regulations coming, but no one knows what they will look like and when they will arrive.

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Martin Bishop

Martin J. Bishop is a partner, litigation department vice chairman and co-chair of the consumer financial services litigation practice at Foley & Lardner LLP. He...

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