12:35 a.m. EDT March 26, 2015 WASHINGTON — President Obama will give a staunch defense of the federal government's consumer protection watchdog in a speech Thursday, defending it against Republican budget cuts the same day the agency is set to propose tough new payday lending rules.

Obama's speech will come three hours after the bureau convenes a hearing on payday loans in Richmond, Va. At the hearing, CFPB Director Richard Cordray will outline a proposal to crack down on payday lending practices that he says often result in "debt traps."

Obama will speak in Birmingham, Ala., Thursday afternoon, the site of the Consumer Financial Protection Bureau's first public hearings on payday lending in 2012. The White House said Obama would discuss ways to "protect families from the types of abuses that helped lead to the greatest economic crisis of our lifetimes."

Rep. Terri Sewell, D-Ala., said she expects Obama to argue for more consumer protections and transparency while in her district. "I recognize the need for emergency credit, but we must also ensure that these products help consumers, rather than trap them to a perpetual cycle of debt," she said.

White House Press Secretary Josh Earnest declined to say whether it was a coincidence that Obama was defending the CFPB's budget on the same day the agency was proposing payday lending rules. By law, the bureau is an independent agency with a director nominated by the president but with its own budget and regulatory power.

"I don't think there's any basis for anybody to call into question the independence of the CFPB," Earnest said Wednesday. "Obviously, it is possible for the CFPB to be completely independent, but also have the person who is responsible for the creation of the CFPB to be proud of their work."

Obama is just as worried about CFPB's independence from Congress. The House budget proposal, passed by Republicans on a mostly party-line vote Wednesday, would rid the bureau of its automatic funding from fees paid by the Federal Reserve Board. That, the Obama administration warns, would subject the agency to partisan budget-cutting and limit its independence.

The rules being advanced by the CFPB Thursday would regulate all forms of short-term lending — including products like payday loans and auto title loans.

Lenders would have to determine at the outset that a consumer is not taking on "unaffordable" debt, and would limit the number of loans a borrower can take out in a year.

"Too many short-term and longer-term loans are made based on a lender's ability to collect and not on a borrower's ability to pay," said Cordray.

The proposal, which the agency is calling a blueprint, must still be reviewed by a small business panel and be open for comments before it begins an even more formal rulemaking process later this year.

But some lenders are already lining up against the proposal, saying it would limit options for people who don't have access to more traditional forms of credit.

"At a time when consumers are demanding choices for flexible, responsible credit products, we're very concerned that this initial proposal could severely restrict their options," said Lisa McGreevy, president of the Online Lenders Alliance, in a statement.

Consumer advocates are also expressing concerns. Mike Calhoun, president of the Center for Responsible Lending, will testify Thursday that the proposal still gives too much flexibility to an industry that "has proven itself adept at exploiting loopholes."