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Senate blocks nominee to lead financial protection agency

Updated at 12:01 p.m. ET

The Senate blocked confirmation on Thursday of Richard Cordray, the former Ohio attorney general picked by President Obama to lead the new Consumer Financial Protection Agency.

Democrats fell short of the 60 votes they needed in a procedural vote to move forward with the nomination of Cordray. Senate Republicans had spoken against the nomination, reflecting their concerns about the creation of the bureau, which was established in last year's Wall Street reform bill.

Fifty-three senators voted for Cordray, while 45 -- all Republicans -- voted against ending debate on his nomination. Massachusetts Sen. Scott Brown (R) voted for Cordray, and Maine Sen. Olympia Snowe (R) voted present.

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"We have nominated somebody, Richard Cordray ... who everybody says is highly qualified." Obama said in a brief press conference in the White House briefing room. "This morning, Senate Republicans blocked his nomination, refusing to let the Senate even go forward with an up-or-down vote on Mr. Cordray. This makes absolutely no sense."

The president hinted that he would not rule out a recess appoint for Cordray to fill the vacancy at the bureau.

Senate Majority Leader Harry Reid (D-NV) hammered Republicans ahead of the vote, saying this is the first time in the history of the Senate that a party has blocked a candidate not because of his credentials but because they didn't approve of the agency. 

"They're blocking his nomination, not allowing a vote because they dont like the federal agency he would lead, an agency that has been established by law," Reid said.

Reid added, "without a director, the Consumer Financial Protection Bureau doesn't have the tools it needs to get the job done. It's shocking that despite the economic crash in our rearview mirror, its easy to look back and see what happened because of Wall Street greed, Republicans in spite of that would leave consumers without a watchdog to guard against the greed of Wall Street. That's unfortunate."

Most Republicans had ultimately opposed the Dodd-Frank legislation that passed in summer of 2010, which included language to establish the CFPB. The Obama administration had initially eyed Elizabeth Warren, the former bailout watchdog, to head the bureau, and the president named her to an advisory role to help establish the agency. But Republicans sent clear signals that nominating Warren as the bureau's first director was a non-starter. She's now running for Senate as a Democrat in Massachusetts.

Senate Minority Leader Mitch McConnell (R-KY) hit back slamming the White House for not addressing Republican concerns about the structure of the Consumer Financial Protection Bureau. The top Senate Republican noted that 45 Republicans had signed a letter months ago outlining their concerns about the CFPB and they have not been addressed by the president.

Republicans want to see a board of directors in charge of the CFPB rather than a single director and more oversight by Congress.

"The president knew about these concerns months ago and he chose to dismiss them. And now he's suddenly making a push to confirm his nominee because it fits into some picture he wants to paint about who the good guys are and who the bad guys are here in Washington," he said.

McConnell also accused Democrats of staging show votes to embarrass Republicans.

"They're setting up a vote they knew will fail so they can act shocked about it later. This is what passes for leadership at the White House right now," he said.