Consumer Financial Protection Bureau director says Trump won't change agency's aggressive efforts

The nation’s top consumer financial watchdog, who some Republicans want President Trump to fire, said Tuesday that the new Republican administration won’t change his approach to aggressively hold banks and other financial firms accountable.

Richard Cordray, director of the Consumer Financial Protection Bureau, wouldn’t comment on what he would do if Trump asked for his resignation but said it was important that independent federal agencies not get “mired in partisan politics.”

The new administration “really shouldn’t change the job at all,” Cordray said in his first public comments since Trump’s inauguration,

“We’re expected to work with different administrations of different points of view,” Cordray said at a forum held by the Wall Street Journal. “We have … an independent mandate to do what we do and we will continue working to protect consumers.”

Whether the president can fire the head of the independent consumer bureau, which was created by the 2010 Dodd-Frank financial regulatory overhaul, is the subject of an ongoing legal dispute.

Cordray’s five-year term doesn’t expire until July 2018, and an agency spokeswoman has said he has no plans to step down.

The agency has been praised by Democrats and consumer advocates for cracking down on abuses by financial firms; it was a key player in the $185-million settlement Wells Fargo & Co. agreed to pay last year for the creation of as many as 2 million accounts without customer authorization.

This month, two Republican senators called on Trump to fire Cordray, echoing the views of many GOP lawmakers who believe the agency’s efforts have restricted lending and reduced consumers’ choices. 

Asked Monday if Trump was going to shake up the bureau’s leadership before Cordray’s term expires next year, White House Press Secretary Sean Spicer said “no decision has been made at this time on that.”

Rep. Maxine Waters (D-Los Angeles) and 37 other members of the Congressional Black Caucus wrote to Trump on Tuesday saying they “would strongly oppose” any attempt to remove Cordray and “would view such an action as an illegitimate abuse of power.”

“Director Cordray has done nothing to give the necessary cause for his removal from office,” the lawmakers wrote. “Communities of color and, indeed, all consumers in America will benefit from having director Cordray remain in his position and continue to independently implement the mandates imposed upon him by Congress as the director of the CFPB.“

Trump has said he wants to dismantle Dodd-Frank. Legislation from House Financial Services Committee Chairman Jeb Hensarling (R-Texas) to overhaul the law would rename the bureau the Consumer Financial Opportunity Commission, replace the single director with five commissioners and subject its budget to congressional appropriations.

Sens. Ben Sasse (R-Neb.) and Mike Lee (R-Utah) based their firing request on an October federal appeals court ruling that the consumer bureau’s structure is unconstitutional because it gives the director too much power.

Under Dodd-Frank, the director serves a five-year term and can be removed only “for cause,” such as neglect of duty.

In a 2-1 ruling, a three-judge panel of the U.S. Court of Appeals for the District of Columbia said that structure violated the Constitution’s separation of powers because it limited the president’s authority.

The court said the solution was to strike down the law’s “for cause” provision, meaning the president could remove the consumer bureau director for any reason, the same as with other executive branch appointees. The agency is appealing the ruling, asking all of the court’s judges to review it.

Some legal scholars said the legal challenge could present problems for Trump if he wants to remove Cordray.

Cordray, a lawyer and former Ohio attorney general, wouldn’t say Tuesday whether he would fight an attempt by Trump to fire him, and he wouldn’t provide his own legal opinion of whether the president had that authority.

“I was nominated and then confirmed by the Senate to serve a term,” Cordray said. “All the independent federal regulatory agencies have terms that overlap one administration or another. That’s meant to preserve their independence. 

“That’s important because without the independence you end up mired in partisan politics, the big-money special interests … will try to dictate results,” Cordray said.

jim.puzzanghera@latimes.com

Follow @JimPuzzanghera on Twitter

 

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UPDATES:

10:15 a.m.: This article was updated with comments from a letter by members of the Congressional Black Caucus warning Trump they would oppose any effort to remove Cordray.

This article originally was published at 7:30 a.m.

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