WASHINGTON â€” The Senate on Thursday blocked President Obamaâ€™s nominee to head theÂ Consumer Financial Protection Bureau, as filibustering Republicans who oppose the powers of the new agency successfully challenged one of the administrationâ€™s main responses to the financial crisis.
President Obama left open the option of a recess appointment, although Republicans have thwarted that tactic recently by staying in rump sessions.
â€œWe are not giving up on this,â€ he said. â€œWe are going to keep on going at it. We are not going to allow politics as usual on Capitol Hill to stand in the way of American consumersâ€™ being protected.â€
Senator Mitch McConnell of Kentucky, the Republican leader, saidÂ his party had made clear for monthsÂ that it would not approve a leader for the watchdog consumer agency until the law that established it was amended.
Until three changes are made, he said, â€œWe wonâ€™t support a nominee for this bureau â€” regardless of who the president is.â€
One of those changes would put a board in charge of overseeing the bureau instead of the director, abolishing the post. Others would subject the agency to the Congressional appropriations process, giving lawmakers more sway over its policies, and would give other financial regulatory agencies a check on its rules.
Senator Sherrod Brown of Ohio, a Democrat, said that the opponentsâ€™ â€œfirst loyalty is to Wall StreetÂ banks.â€
The agency can accomplish part of its mission, the protection of consumers from unscrupulous lending practices, without having a director in place. But some of its new powers are vested by law in the director, so it could not expand into realms like the regulation of payday lenders and other nonbank financial businesses.
The power struggle between the financial sector and its check-cashing, card-carrying customers has developed into one of the fault lines along which the political parties are playing out their own rivalries as the election year arrives.
Previous opposition from Republicans led to the withdrawal of Elizabeth Warren from consideration for the post. She is a Harvard law professor who was the driving force behind the agencyâ€™s creation and is now a Democratic candidate for the United States Senate in Massachusetts.