Trump Supports Effort to Reconfigure CFPB Leadership
After weeks of silence on the question of the future of the Consumer Financial Protection Bureau (CFPB), the Trump Administration has come out in favor of the concept of the agency but opposed to its set-up of a single director who does not answer to the Executive Branch.
According to a Bloomberg report, the Department of Justice filed documents on Friday at the U.S. Court of Appeals in Washington that supported the legal argument put forth by PHH Corp., the Mount Laurel, N.J.-based lender that sued to overturn a $109 million penalty imposed by the CFPB. A district court ruling from last fall declared the single-director CFPB leadership set-up unconstitutional, but the CFPB successfully pushed for a rehearing of the case.
The Trump Justice Department sided with PHH regarding the legality of how the CFPB is designed, with a director that cannot be removed from office prior to the expiration of his term. “A removal restriction for the director of the CFPB is an unwarranted limitation on the president’s executive power,” the Justice Department stated in its court filing, adding that administration was not seeking to declare the entire agency and its operations unconstitutional.
CFPB Director Richard Cordray’s term expires in July 2018. Several bills are already introduced in Congress regarding the CFPB, including one from Sen. Ted Cruz (R-TX) that seeks to shut down the agency.