"We're gonna begin working to expand our program to non-banks, which is an area we haven't been able to touch up until now," Cordray told reporters traveling with the president in Cleveland, adding he would begin working as soon as his appointment is made official.
Obama is in Ohio Wednesday to deliver remarks on the economy at a high school in Shaker Heights in suburban Cleveland, Cordray's home town.
The recess appointment comes even though Republicans in the U.S. Senate attempted to block Cordray by holding "pro-forma" sessions during the holiday break.
"After months of delay by Senate Republicans, Cordray's nomination was called and defeated by a filibuster. Sadly, there were no objections to Cordray's qualifications only a decision by Senate Republicans to cripple this agency and try to politically punish the president," said Sen. Dick Durbin, D-Ill., the assistant majority leader.
"In appointing Richard Cordray to head the Consumer Financial Protection Bureau, President Obama has done what's necessary to ensure American consumers are protected from the tricks and traps of big banks and have the information they need to make sound financial decisions," he said.
Sen. John Cornyn, R-Texas, blasted the action.
"Today's appointment of another unaccountable czar is an arrogant abuse of presidential power," Cornyn said in a statement. "Then-Senator Obama has previously called such a recess appointee 'damaged goods.'
"So we are left to wonder why the president is unwilling to work with Congress to adopt common-sense improvements in accountability and transparency that would protect small businesses from more job-killing regulations and red tape."
Cordray's appointment, which runs until the end of 2012 unless he is confirmed by the Senate, will permit the financial protection bureau to set up new regulations to police financial institutions and put financial regulatory reforms approved by Congress into effect.
Obama has made 28 recess appointments in more than three years in office, compared to 61 for former President George W. Bush at the same point in his presidency, The New York Times said.