(Adds background on politics and the SEC)
By Sarah N. Lynch and Jeff Mason
WASHINGTON, Oct 20 (Reuters) - President Barack Obama on Tuesday selected Democrat Lisa Fairfax and Republican Hester Peirce to serve on the U.S. Securities and Exchange Commission, after months of delays and pressure from liberal groups to nominate someone who will be tough on Wall Street.
Fairfax, a law professor at George Washington University, has the potential to win support from progressive Democrats like Massachusetts Senator Elizabeth Warren.
Her name surfaced as a contender in media reports earlier this year, after liberal groups pressured the White House not to hire a corporate lawyer who had previously worked to represent Wall Street.
Lisa Gilbert, a director at the non-profit consumer rights group Public Citizen, said her organization is hopeful that Fairfax will be a "strong investor advocate" based on some of the academic work Fairfax has produced.
Fairfax, for instance, penned a primer on shareholder democracy and activism.
Peirce, a former Senate Banking Committee staffer who now works as a senior research fellow and director of the financial markets working group at the Mercatus Center at George Mason University, was widely expected to be tapped for the Republican seat.
Both nominees must be confirmed by the Senate before they can start serving their terms.
If confirmed, Fairfax would replace Luis Aguilar, whose term expired, and Peirce would replace Daniel Gallagher who stepped down in early October.
The financial services industry will be anxious to see how the two newcomers may potentially shake up the dynamics at the SEC, which in recent years has become deeply divided and hamstrung by politics.
Disagreements have fueled delays in crafting new Wall Street regulations, and differing views on enforcement policy have produced many split votes on whether to file charges against Wall Street corporations and individuals.
One topic that has proven particularly controversial at the SEC are regulatory waivers. Banks and other companies that break criminal laws or face civil fraud charges must apply to the agency for waivers to keep operating normally.
Last year, SEC Commissioner Kara Stein, a Democrat, began publicly dissenting on waivers, saying the agency was too often rubber-stamping them and creating a policy of "too-big-to-bar."
Aguilar and Stein have often voted in tandem against the waivers. Although they are only two votes on the five-member panel, they have managed to influence the outcome in a few instances where SEC Chair Mary Jo White was recused and unable to cast a tie-breaking vote.
White has said she does not believe waivers should be used as an enforcement tool to deter future misconduct.
White's differing views from Stein on waivers have prompted a backlash from the liberal left, including Warren.
Some Democrats have also tried to convince the SEC to adopt rules opposed by Republicans and business groups to require companies to disclose their political spending.
Some lawmakers used Obama's announcement on Tuesday as an opportunity to renew those calls again.
"I hope that both nominees will support a corporate disclosure rule, and I look forward to discussing their views on this important issue," New York Democratic Senator Charles Schumer said. (Reporting by Sarah N. Lynch, Julia Edwards and Jeff Mason; Editing by Peter Cooney and Tom Brown)