Recess appointee Richard Cordray ready to 'prove' worth of consumer bureau (+Video)

While the CFPB has been at work for more than a year, its operations were limited to larger banking institutions until its director was in place, under stipulations in the Dodd-Frank financial regulatory reform law. Cordray's arrival allows the CFPB to begin oversight of nonbanks, including payday lenders, mortgage servicers and originators, and private purveyors of student loans, among others.

These groups are key players in the consumer finance world because of their reach – 20 million American households use payday lenders, according to Cordray – and because “they have largely escaped any meaningful federal oversight” even though they typically compete with banks.

Cordray’s plans for the CFPB come amid strident criticism of the manner of his appointment.

Republicans were almost unanimous in their disdain for the president’s maneuver. Senate minority leader Mitch McConnell (R) of Kentucky objected to the move on constitutional grounds, saying it “fundamentally endangers” Congress’s ability to check the power of the president. 

In terms of the appointment’s constitutionality, appointing the CFPB director Wednesday rather than Tuesday may matter. On Tuesday, the Senate was technically in recess. But Obama acted on Wednesday to gain an additional year of Cordray’s service atop the CFPB: Because recess appointees serve until the end of the “next session” of Congress, Cordray may be able to serve through 2013.

One GOP voice raised in support of Cordray was Sen. Scott Brown of Massachusetts. Senator Brown, who faces a tough reelection battle with putative Democratic opponent Elizabath Warren, has tacked toward the political center on several issues to woo voters in the liberal-leaning Bay State. 

"I support President Obama's appointment today of Richard Cordray to head the CFPB," Brown said in a statement Wednesday. "I believe he is the right person to lead the agency and help protect consumers from fraud and scams. While I would have strongly preferred that it go through the normal confirmation process, unfortunately the system is completely broken.”

Ms. Warren launched the CFPB and initially led it, but Obama did not nominate her to be its permanent director. 

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