For those who have been wondering—as I did in a previous post—what the new presidential administration would mean for the Consumer Financial Protection Bureau (CFPB), an agency that has been in Republicans’ crosshairs virtually since it came into existence, we now have at least the beginnings of a concrete answer. Claiming that the CFPB’s leadership structure is unconstitutional, the Trump administration asked the U.S. Court of Appeals for the D.C. Circuit last week to allow the president to fire the bureau’s director, Richard Cordray, at will. The administration did not go so far as to ask the court to authorize elimination of the agency, however.
In its brief to the appeals court, the U.S. Department of Justice (DOJ) argued that an October split ruling by a three-judge panel of the D.C. Circuit correctly determined that the CFPB’s single-director leadership structure violated the U.S. Constitution’s separation of powers clause. And, according to the DOJ, giving the president the power to fire the director at will rather than for cause, as was required by the 2010 Dodd-Frank Act, would serve to remedy the alleged structural problem. Continue Reading