Senators call on Trump to fire Cordray (despite appeal)

Donald Trump, “promptly after his inauguration” as president, should fire CFPB Director Richard Cordray, two senators have written to the vice president-elect, despite an on-going legal battle over whether the director may be fired before the end of his five-year term.

“We write to request that promptly after his inauguration President Trump remove Richard Cordray from his position as Director of the Consumer Financial Protection Bureau,” wrote Republican Sens. Mike Lee (Utah) and Ben Sasse (Nebraska) on Jan. 9 to Mike Pence, the vice-president elect. “Given the CFPB’s unconstitutional structure, removing Director Cordray would be consistent with President Trump’s oath to ‘preserve, protect, and defend the Constitution of the United States’ and his duty to serve as an independent guardian of the U.S. Constitution,” the senators wrote.

Cordray is now serving a five-year term, which is scheduled to conclude in 2018. Under the law setting up CFPB, the director’s term could only be cut short “for cause.” However, last fall, the U.S. Court of Appeals for the D.C. Circuit ruled that the way the law creating the consumer bureau is written is unconstitutional, in that the CFPB is the first agency to concentrate administrative powers in an independent single director not removable except for cause. To remedy that, the court ruled to strike the clause in the Dodd-Frank Act (the enabling legislation for the CFPB) which said the director could be removed “for cause,” effectively allowing the president to dismiss the head of the agency at will.

However, the CFPB filed a petition with the D.C. Circuit in November asking it to grant a rehearing of the lawsuit “en banc” of the decision in the case (CFPB v. PHH Corporation). The court has not yet acted on the CFPB petition. (Reportedly, the court’s rules do not establish a deadline for a decision on a petition for a rehearing en banc.)

In their letter to Pence, the two senators assert that – despite the en banc rehearing request – the new president will have the power to remove Cordray. “Despite this appeal, the president retains constitutional authority to remove the director until a valid court order says otherwise. Like all government officials, the president is sworn to uphold the Constitution and is not duty-bound to respect unconstitutional statutes,” the two wrote.

In listing reasons why the director should be removed, the senators state that Cordray has “pursued costly regulatory policies that are radically opposed to the Trump Administration’s pro-growth agenda,” and assert that CFPB “has repeatedly advanced ‘unnecessary regulations that kill jobs;’ ‘bloat government;’ have an ‘enormous…impact on our economy, communities and individual Americans from coast to coast;’ and have inflicted ‘profound damage [on] our economy and our freedoms.’”

In particular, they write, “the CFPB has issued regulations that have disproportionately burdened credit unions and community banks …”

Press release: Sen. Ben Sasse (R-Neb.), “Sasse and Lee to Trump: Fire Cordray”