This week's showdown over the Consumer Financial Protection Bureau will likely be the first of many as Democrats prepare to make consumer protection a top campaign issue in the 2012 election.
The Senate is set to vote Thursday on a motion to consider the nomination of Richard Cordray to be the CFPB's first director, and the White House has launched a media blitz targeting states where several incumbent Republicans are up for reelection.
Although the pressure is unlikely to sway enough GOP lawmakers to advance the nomination, observers said the vote and the public campaign set the stage for a narrative that Democrats will reiterate throughout the campaign.
"A lot of this is electioneering," said Mark Calabria, the director of financial regulations studies at the Cato Institute, and a former senior staffer for Sen. Richard Shelby, the top Republican on the Senate Banking Committee. "I don't think they're going into this thinking they're going to somehow scramble their way to 60. I think they're thinking, 'We can paint Republicans as friends of Wall Street.'"
Democrats need 60 votes to advance the nomination, but 44 Republicans-more than enough to stop the nomination-have said they will not allow a vote on any nominee unless the administration makes a series of structural changes to the CFPB, including replacing its director with a commission and putting it on the Congressional appropriations process.
The administration began its push for a vote on the CFPB director last week, when Treasury Secretary Tim Geithner called on the Senate to move quickly on Cordray's confirmation.
On Sunday, the White House outlined a plan to appeal directly to voters in seven states — Maine, Tennessee, Alaska, Indiana, Nevada, Utah and Iowa — by using local media to drum up support for Cordray and emphasize the benefits for consumers once the bureau finally has a permanent director.
Until a director is confirmed, the bureau cannot write new rules curbing abusive acts or practices, nor can it supervise nonbanks.
The White House's National Economic Council also released a report on Sunday on the regulatory gaps that exist between banks and nonbanks, and the effect on consumers. "While Congress, the president and the American public have made historic progress in establishing a single agency dedicated to protecting consumers, every day that (the) CFPB goes without a director is another day that American families remain at risk," the report said.
Although the Senate vote is expected to fail, it still has the benefit of forcing Republicans to go on record against the nomination. It's not unusual for Congress to hold votes that are all but certain to fall short (see: debt ceiling, payroll tax) and industry observers expect Democrats will take as many opportunities as they can to force the issue.
"There will be a series of votes throughout 2012," said Brian Gardner, a political analyst at KBW Inc.'s Keefe, Bruyette & Woods Inc. "This is not going away."
Although the vote this week would pave the way for a potential recess appointment, Gardner and others continue to view that strategy as a political minefield, and an unlikely scenario.
"There are some legal arguments for getting around the technical aspects of whether this is a recess or not," Gardner said. "My guess is there are Democrats who are urging the White House to proceed very cautiously on that. Once you set that precedent, it will be used against you."
