Barack Obama bucked GOP opposition and named former Ohio attorney-general Richard Cordray as head of the nation's new consumer watchdog – but the appointment drew stinging criticism from Republicans in Congress, who suggested the courts would block the move.

Cordray will become the director of the newly-formed Consumer Financial Protection Bureau, a body set up to oversee mortgage companies, payday lenders, debt collectors and other financial companies that were blamed by many Americans for the US's present economic difficulties.

Republicans tried to stall Cordray's nomination because they think the consumer agency is too powerful and unaccountable. The appointment seems certain to raise the level of confrontational politics for a president seeking re-election.

The Senate minoity leader, Mitch McConnell, accused Obama of an unprecedented power grab that "arrogantly circumvented the American people."

John Boehner, the House speaker, said: "It's clear the president would rather trample our system of separation of powers than work with Republicans to move the country forward. This action goes beyond the president's authority, and I expect the courts will find the appointment to be illegitimate."

The White House said Obama was left with little choice to get the consumer agency fully running after months of stalemate in Congress.

White House communications director Dan Pfeiffer announced Obama's move on Twitter after senior administration officials first confirmed it to the Associated Press.

Obama, accompanied by Cordray, planned to talk about his decision at an economic event in Cordray's home state of Ohio.

Cordray would take over the job later in the week and stands to serve for at least the next two years, covering the length of the Senate's session.

Obama will say: "I refuse to take no for an answer. I've said before that I will continue to look for every opportunity to work with Congress to move this country forward. But when Congress refuses to act in a way that hurts our economy and puts people at risk, I have an obligation as president to do what I can without them."

As president, Obama has constitutional power to make appointments during a congressional recess.

However, Republicans in the Senate have had the Senate running in "pro forma" sessions – meetings that are theoretically open, but with no actual business planned. Democrats started the practice when George Bush was president, in order to try to stop him from making recess appointments.

The Senate held such a session on Tuesday and planned another one on Friday. Republicans that contend Obama cannot make a recess appointment during a break of less than three days, based on years of precedent.

But the Obama adminsitration contends such an approach is a gimmick. For all practical purposes, the Senate is in recess and Obama is free to make the appointment on his own, administration officials told the AP.

McConnell said that Obama's move "lands this appointee in uncertain legal territory, threatens the confirmation process and fundamentally endangers Congress's role in providing a check on the excesses of the executive branch."

The president also was expected to announce other recess appointments, possibly including nominees to the National Labor Relations Board.

The agency, which oversees union elections, has been a target of Republicans who claim it has leaned too far in favor of organized labor. The board usually has five members but has operated for months with three. As of his week, it is down to just two members.

Republicans have little opposition to the qualifications of Cordray, a former Ohio attorney-general: their objection is with the consumer agency itself.