The move is likely to inflame supporters of Elizabeth Warren, the popular Harvard professor who has been helping set up the bureau as a special advisor to President Barack Obama. Ms. Warren, a longtime critic of the financial-services industry, pushed for the CFPB's creation and is said to have wanted the job herself.
In the end, White House officials concluded nominating Ms. Warren could hurt the fledgling bureau, given her unpopularity with many lawmakers, and wasn't a battle worth waging, these people said.
Mr. Cordray, who currently heads the CFPB's enforcement division, may not be as polarizing a figure as Ms. Warren, but his confirmation won't be without a fight. Republican senators have already said they will block confirmation of anyone to the post unless the White House agrees to structural changes, including turning the CFPB into a five-member commission.
His leading role in filing lawsuits against mortgage lenders for their foreclosure practices is also likely to be grist for lawmakers, who have beaten up on Ms. Warren over her involvement in mortgage-settlement talks between federal and state authorities.
Mr. Cordray, who joined the CFPB last year, gained notice for his lawsuit last year against the GMAC Mortgage unit of Ally Financial Inc. He described the business practices used by companies now under a nationwide investigation as "a business model built on fraud."
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