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UPDATE 2-U.S. consumer agency head Cordray to leave by end of month

(Adds comment from White House, lawmakers and recasts)

WASHINGTON, Nov 15 (Reuters) - The head of the U.S. Consumer Financial Protection Bureau Richard Cordray will resign at the end of the month, paving the way for President Donald Trump to appoint his own director and reshape an agency that has been a scourge of Wall Street.

Cordray, 58, told staff of his departure in a note on Wednesday. He gave no reason for his resignation, which comes ahead of the official end of his term in July 2018. A spokesman for the CFPB declined to give further details.

Created by President Barack Obama in the wake of the financial crisis, the CFPB under Cordray has imposed steep penalties on banks, auto dealers, student lenders and credit card companies for alleged predatory lending practices.

He has been a bulwark against efforts by Trump and congressional Republicans to roll back Obama-era financial policy and on Wednesday he alluded to the agency's uncertain future without him.

"One thing I have tried to reinforce this year is that the Consumer Bureau is far more than its director," he said. "I am confident that you will continue to move forward, nurture this institution we have built together, and maintain its essential value to the American public.

"And I trust that new leadership will see that value also and work to preserve it perhaps in different ways than before, but desiring, as I have done, to serve in ways that benefit and strengthen our economy and our country."

A White House spokesman said Trump would select a successor.

"The Administration will announce an acting director and the President's choice to replace Mr. Cordray at the appropriate time," said Raj Shah, deputy press secretary.

Trump is expected to quickly move an acting director into place who shares his desire to deregulate. He could possibly tap Treasury Secretary Steven Mnuchin, who would then delegate day-to-day operations to subordinates, according to lawyers who closely follow the CFPB.

The brainchild of Democratic Senator Elizabeth Warren, the CFPB has been a source of bipartisan conflict with prominent Republican Party members including Trump, saying the agency overreaches its authority and should be more accountable to lawmakers and voters.

Consumer advocates say it plays a critical role in protecting Americans against financial abuse.

In a tweet, Warren warned the White House to appoint someone who could hold major financial firms accountable.

"At the zCFPB, Rich Cordray forced the biggest financial institutions to return $12B directly to the people they cheated," she wrote.

"The new Director of the zCFPB must be someone with a track record of protecting consumers & holding financial firms responsible when they cheat people. This is no place for another Trump-appointed industry hack," she wrote.

Widely rumored to be considering a run for governor as a Democrat in his home state of Ohio, Cordray made no mention of his future plans.

He suffered a major defeat last month when the Senate killed a rule released by the CFPB in July which would have allowed borrowers to band together to sue banks, credit card issuers and other financial companies.

Cordray took the unusual step of personally asking Trump to veto the legislation allowing financial companies to block class action laws suits.

The defeat set a precedent for Congress to curtail other CFPB rules, and lawyers and lobbyists expect a similar attempt to push back a new rule curbing payday lenders. (Additional reporting by Lisa Lambert,; Writing by Carmel Crimmins.; Editing by Jonathan Oatis and Alistair Bell)