In October a federal court declared that the structure ofthe Consumer Financial Protection Bureau was unconstitutional, with too littleoversight of the actions of the Director of the bureau. As the WashingtonPost reported on Friday:
Last month, a federal appeals court dealt a major blow to the agency bycalling for the CFPB to be restructured so that the director could be removedby the president at will. The decision, if unchallenged, could have allowedDirector Richard Cordray to be replaced by President-elect Donald Trump beforethe end of his term, which expires in 2018.
With the electionof Donald Trump whose campaign for President promised the dismantling of theDodd-Frank Act which created the CFPB, the CFPB is not surprisingly fightingthe judgement:
The agencypetitioned the ruling Friday on the grounds that the decision, if left tostand, would interfere with Congress’s ability to create independent agenciesrun by a single director. In the petition, the agency said the ruling couldalso affect other independent agencies, pointing to the Social Security Administration,the Federal Housing Finance Agency and the Office of Special Counsel. When theCFPB was created, it was structured so that the director could be removed foronly cause, shielding the role from some political shifts in Washington.
Although the Director is not permitted to speak about partisan politics, Democrats in Ohio are encouraging Richard Cordray to run for governor. Cordray just unveiled a Twitter account; @RichCordrayOH which seems like someone might be hedging their bets.
Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group
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