Entering into the first full week of the Trump Administration, the battle lines over the future of Richard Cordray as Director of the Consumer Financial Protection Bureau are being drawn even sharper.
The latest salvo was launched by the Congressional Black Caucus. In a Jan. 24, 2017, letter, penned by Rep. Maxine Waters (D-Calif), Ranking Member of the House Committee on Financial Services, and Rep. Cedric Richmond (D-La), Chairman of the Congressional Black Caucus, the CBC warned the president against removing Cordray prior to the expiration of his term in July 2018.
Extraordinary remedy. The letter stated, "No President of the United States has ever removed the head of an independent agency for cause. The absence of any precedent suggests that ‘for-cause removal’ is an extraordinary remedy whose use must be subjected to enhanced congressional, judicial, and public scrutiny. We are especially troubled by suggestions that your administration is seeking to twist Director Cordray’s attempts to address discrimination allegations within the CFPB as cause for removal."
The CBC member added that removal of Cordray before his term expired would be viewed "as an illegitimate abuse of power."
"Fire King Richard." The issue of Cordray’s fate has, predictably, fallen along partisan lines. Prior to Trump’s inauguration, Sens. Ben Sasse (R-Neb) and Mike Lee (R-Utah) urged the incoming administration to fire Cordray "promptly" after then President-elect Donald Trump’s inauguration. In a Jan. 9, 2017, letter to then-Vice President-elect Mike Pence, Sasses and Lee wrote, removing 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" (see Banking and Finance Law Daily, Jan. 10, 2017).
Partisan litigation. On the other side of the aisle, Financial Services Committee Democrats, led by Waters, said they will "strongly oppose any action towards removing" Cordray from his position prior to the expiration of his term. In a letter to then President-elect Donald Trump, the legislators "demanded" that attempts to remove Cordray be denied. The letter added, "We caution you not to engage in partisan litigation, particularly since it is likely to be unsuccessful and will needlessly divert government resources away from other important priorities" (see Banking and Finance Law Daily, Jan. 11, 2017).
Effective leadership. Also, 10 Democratic members of the Senate Banking Committee sent a letter to Cordray, on Jan. 17, 2017, praising him for his work at the CFPB and asserting that Cordray’s "leadership as an effective consumer watchdog at the agency is needed under the incoming administration." According to the Senators’ letter, polling statistics show that 71 percent of Americans—both Republicans and Democrats—"approve of the CFPB’s mission." Moreover, about 55 percent of Republicans who voted for then President-elect Donald Trump believe that the CFPB "should be left alone to continue its work or even be given expanded authority to do more," the letter states (see Banking and Finance Law Daily, Jan. 18, 2017).
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