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Consumer Bureau Gets a Leader, and Dodd-Frank Gets an Enforcer

There’s a strong argument that the most important meaning of Tuesday’s pivotal roll call isn’t that the Senate has saved the Senate from itself. The filibuster showdown was averted, for now, but it hasn’t gone away.

The vote was one of the most important of 2013 for a bigger reason: It finally enacts a central provision of the Dodd-Frank financial services regulatory overhaul — the one President Barack Obama signed into law three years ago this week.

When 17 Republicans joined all 54 Democrats on the first ballot of the day, it became clear that the “nuclear option” for advancing executive branch nominations wasn’t going to be deployed by the majority anytime soon. So the queasy equilibrium at the Capitol had been preserved a little while longer.

But the real parliamentary consequence of the vote was to clear a path for Richard Cordray to become the first Senateconfirmed director of the Consumer Financial Protection Bureau. He’s been on the job under a contested recess appointment for 18 months but will now be able to serve free of any cloud of legitimacy until the end of this administration.

In that time, he should be able to set up a powerful financial watchdog system. The practical effect will surely have a direct impact on the lives of a couple of hundred million more Americans — everyone, in fact, who seeks a product or service from a financial services business.

The CFPB was created by Congress in the wake of the 2008 financial crisis to look out for the interests of the customers of banks, mortgage companies, credit card businesses and securities firms. It was given broad power to enforce consumer protection laws and to make sure consumer interests were represented whenever federal regulators contemplated changes to economic policy. And it was freed from the vagaries of the annual budget process by being funded as an autonomous arm of the Federal Reserve.

Republicans and their friends on Wall Street have hated all those ideas ever since they were first proposed. Since they all came to pass anyway, the GOP has sought to prevent the agency from getting off the ground by working to prevent anyone from wielding the agency’s principal powers.

In other words, the Cordray opposition has never been based on the former Ohio attorney general’s qualifications. It has always been about relitigating the arguments about what the CFPB should be permitted to do, with what money and under whose direction.

“Wait until his confirmation and you’ll see more intrusion into your personal life,” Michael B. Enzi of Wyoming warned on the floor before the big vote. He said Cordray will have “more power beyond anybody else in the federal government.”

With the cloture vote Tuesday, and the 66-34 confirmation vote later in the day, the crusade to stop that theory from being tested is now at an end. Republicans say they won’t abandon their push to replace the director’s position with the sort of bipartisan commission that governs most federal regulatory agencies, or to make the CFPB subject to the yearly appropriations process.

For all intents and purposes, though, such a rewrite is now a dead letter. Clear evidence of that was the roster of Republicans who voted to break the Cordray filibuster: Among them were Bob Corker of Tennessee, Mike Johanns of Nebraska and Mark S. Kirk of Illinois — all members of the Banking Committee with jurisdiction over Dodd-Frank.

They were joined by Rob Portman of Ohio, who had been leading the legislative effort to remake the CFPB. He says he’s now ready to set aside that campaign because of assurances he’s received from Cordray that he’ll come to the Capitol to explain his agency’s budget to appropriators and also make sure a cost-benefit analysis has been conducted before any proposed agency regulation is put into effect.

Democrats are now arguing they are quietly doing the financial services industry a bit of a favor, if only by creating a sense of certainty about its regulatory future that’s been lacking so far this decade. And, truth be told, some banking and brokerage executives concede that, since his January 2012 appointment, Cordray has been more reasonable and even-handed than they ever expected.

The Cordray confirmation means “we will be able to say loudly, clearly and with confidence: The consumer agency is the law of the land and is here to stay,” Elizabeth Warren declared on the floor Tuesday morning.

Warren is a senator in large part because, when she was a bankruptcy law professor at Harvard, she talked senior Hill Democrats into pushing for a consumer protection board as part of their response to the Wall Street meltdown.

Once the agency was created, Republicans made it abundantly clear they’d never allow Obama to install her as its first director. She ran for the Senate instead.

So the day’s big vote was as much a moment of triumph for Warren as it was for John McCain, the filibuster-fixer who was maverick-in-the-middle once again. Cordray was her hand-picked deputy for the CFPB, and he will now run the agency she conceived but could never lead.