In a 53-45 vote, all but one Senate Republican voted to maintain a filibuster of the nominee, former Ohio Attorney General Richard Cordray, who was a top aide to the bureau's architect Elizabeth Warren.
Senate Republicans had promised to hold up Cordray's nomination until Obama alters the makeup of the agency, one of the pieces of the 2010 Dodd-Frank financial reform law.
McConnell: It's About Accountability and Transparency
Sen. Minority Leader Mitch McConnell of Kentucky said Thursday's vote is about "accountability and transparency" in the CFPB. He also chastised Obama for dismissing the GOP's concerns about the agency knowing his nominee's confirmation would be stalled.
"Now, he's suddenly making a push to confirm his nominee because it fits into some picture he's wants to paint of who the good guys are and who the bad guys are here in Washington," McConnell said Thursday. "Until this or any other president addresses these legitimate concerns, we cannot and will not support a nominee."
The Republicans have said their proposed changes would provide much needed oversight to the agency, but critics charge the GOP with attempting to water the CFPB down.
Senate Republicans, who have said they approve of Cordray's credentials and politics, want a panel to lead the agency instead of a single director, the CFPB to go before Congress and ask for funding, and to allow other financial regulators to overrule the bureau.
GOP Blocking Will of the People?
U.S. Sen. Tim Johnson, D-S.D., the Senate Banking Committee Chair, said these proposals would weaken the agency and that Congress last year already debated and rejected them.
"The minority party is distorting the Senate confirmation process mandated by the Constitution to rewrite a law against the wishes of the American people," Johnson said on the Senate floor. "Why do Senate Republicans remain opposed to consumer protection?"
Obama has made a push to get enough Republicans to drop their objection to confirming Cordray. Sen. Scott Brown, a Republican of Massachusetts locked in a competitive race against Warren, CFPB's creator, voted with Democrats to move Cordray's confirmation forward. Sen. Olympia Snowe of Maine voted "present."
During a Tuesday speech in Osawatomie, Kan., Obama said a consumer watchdog like Cordray would prevent a student or service member from being duped into taking an unaffordable loan.
"The Republicans in the Senate refuse to confirm him for the job; they refuse to let him do his job," Obama said. "Does anybody here think that the problem that led to our financial crisis was too much oversight of mortgage lenders or debt collectors?"