President Obama on Dec. 4 bypassed intransigent Republican senators and named former Ohio Attorney General Richard Cordray as a recess appointee to direct the Consumer Financial Protection Bureau, allowing the new agency to begin its work in earnest.

The move comes during the ongoing New Year’s congressional recess. Republican senators had blocked the consumer bureau appointment because they want a change in the new agency’s structure to, among other things, include a five-person panel to head it instead of a single director.

The president accused Senate Republicans of blocking Cordray’s confirmation because they want to weaken the Dodd-Frank financial regulatory law that created the agency. “When Congress refuses to act and as a result hurts our economy and puts people at risk, then I have an obligation as president to do what I can without them,” Obama said in remarks at a high school in Shaker Heights, Ohio.

“Financial firms have armies of lobbyists in Washington looking out for their interests,” Obama said. “You need someone looking out for you, fighting for you.”

The bureau last week began seeking comments on whether and how to revise Regulation E, which governs implementation of the Electronic Fund Transfer Act (see story).  In November, consumer groups banded together to urge the bureau to require prepaid debit card issuers to provide consumers with the same mandatory protections that come with traditional debit cards under Reg. E (see story).

Obama nominated Cordray to be the bureau’s first director in July, almost one year after enactment of the Dodd-Frank financial regulatory law creating the agency. Republicans blocked Cordray’s confirmation by the Senate last month. Republican congressional leaders criticized Obama’s decision and said it may threaten confirmation of other nominees.

The Republican opposition caused Elizabeth Warren, who developed the consumer agency, to leave the fledgling operation and return to Massachusetts, where she is a candidate for Senate. The lack of a director has so far hamstrung the new agency, preventing it from passing new regulations and embarking on major initiatives.

Obama made the announcement in Ohio, where Cordray was attorney general from 2009 to 2011 and treasurer before that. The state will be a key battleground in the 2012 presidential race, and Obama is using his confrontations with congressional Republicans and a populist economic message as part of his campaign strategy.

Obama accused Republicans of blocking Cordray because they don’t like the Dodd-Frank law, which intended to provide more oversight and regulation of the financial industry. “They want to weaken the law,” he said. “They want to water it down.”

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