UPDATE 2-US consumer agency chief Cordray heads toward confirmation
WASHINGTON, July 16 (Reuters) - The U.S. Senate on Tuesday moved toward confirming a director of the Consumer Financial Protection Bureau, ending a two-year standoff in Congress and putting the new agency on sounder legal footing.
Democrats overcame long-held Republican objections to end debate over Richard Cordray's nomination to head the bureau, which was created by the 2010 Dodd-Frank Wall Street reform law.
A final Senate vote could come later on Tuesday, and Cordray, who has been heading the bureau in a temporary position since January 2012, is expected to garner enough support to be confirmed.
Bureau advocates and consumer law experts said final Senate confirmation would clear up a number of questions, including Cordray's legal status as the temporary bureau director and the agency's authority to oversee new areas such as debt collection.
"There is no doubt that the consumer agency will survive beyond the crib," Senator Elizabeth Warren told reporters after the vote. Warren, a Massachusetts Democrat, set up the consumer bureau before running for the Senate last year.
The consumer bureau, which opened in 2011 and oversees mortgages, credit cards and other consumer-oriented financial products, had been the source of controversy since its creation.
Opponents said it had too much authority over a wide array of financial products. Others said it should be run by a bipartisan board rather than by a single director and funded through the congressional appropriations process instead of the Federal Reserve.
Experts said they do not expect the existence of a confirmed director will unleash a much more aggressive posture from the already active agency.
Financial industry representatives say the bureau has communicated with them about new regulations and has been open to suggestions about how to improve its rules.
"At the same time, removing the big legal threat that a lack of a confirmed director created...over their heads I think gives them greater confidence, particularly in the nonbank marketplace," said Ed Mierzwinski of US PIRG, a consumer advocacy group.
He said confirming Cordray would also remove some confusion for "good guys" in the financial marketplace about whether the bureau's rules would stand up in court.
President Barack Obama had used a controversial method known as a "recess appointment" to name Cordray to head the agency in early 2012. Legal challenges to other recess appointments made by Obama had raised questions of whether Cordray's standing could come under scrutiny.
On Tuesday, 71 senators voted to end debate and move to a final vote for Cordray. Democrats had threatened to change Senate rules for confirmations unless they got enough Republican votes to pass the 60-vote threshold to avert a filibuster.
The consumer bureau declined to comment on the vote.
In its first two years, the agency has passed rules to make mortgage applications easier to understand and lending less risky, warned auto lenders on discriminatory rates, and has hinted at a crackdown on the payday lending industry.
It has also issued a number of enforcement actions, with a particular focus on credit card companies for deceptive marketing.