Trump Should Fire CFPB’s Cordray, Hensarling Says

By Gregory Roberts

President Donald Trump should immediately dismiss Richard Cordray as director of the Consumer Financial Protection Bureau, the top-ranking House Republican on financial services issues said Feb. 7.

“Personnel is policy, and so the president—I would urge him to immediately fire the head of the Orwellian-named Consumer Financial Protection Bureau,” the congressman, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) said in an interview on the Fox Business Network.

With that recommendation, Hensarling joined other Republicans in Congress is pressing for the dismissal of Cordray, who was appointed by Democratic President Barack Obama to a five-year term in 2013. Sens. Mike Lee (R-Utah) and Ben Sasse (R-Neb.) wrote Trump shortly before his Jan. 20 inauguration and urged him to can Cordray.

The CFPB has been a frequent target of Republicans, who view the agency as a prime example of regulatory overreach that throttles businesses. Democrats generally support the bureau, which was created under the 2010 Dodd-Frank Act as part of the response to the Great Recession and the abusive business practices that contributed to it.

Whether Trump legally can fire Cordray preemptively is an open question. Dodd-Frank says the director can be cashiered only for cause, yet a federal appeals court ruled in October that the CFPB is “unconstitutionally structured” because it is an independent agency overseen by a single director who cannot be removed at the will of the president. The court struck the for-cause clause from the law, but that order has been stayed pending a decision on a rehearing of the case.

Hensarling said he believes Trump has the legal authority to remove Cordray now.

Senate Minority Leader Charles Schumer (D-N.Y.) and Sens. Sherrod Brown (D-Ohio) and Elizabeth Warren (D-Mass.) said in telephone news conference Jan. 18 that they would rally pubic opinion against Cordray’s ouster should Trump move to dismiss him. They said a firing likely would not withstand a legal challenge.

Hensarling sponsored a bill last Congress that would have replaced the CFPB’s sole director with a five-member bipartisan commission, which would have resolved the constitutional issue. That bill died with the last Congress, but he is expected to reveal a new version this month. The Democratic senators said they oppose the commission idea.

To contact the reporter on this story: Gregory Roberts in Washington at gRoberts@bna.com

To contact the editor responsible for this story: Michael Ferullo at MFerullo@bna.com

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