On January 24, 2017, 38 members of the Congressional Black Caucus (CBC) sent a letter to President Trump urging him to cease any planned efforts to remove Consumer Financial Protection Bureau (CFPB) Director Richard Cordray. The letter was co-authored by the ranking member of the U.S. House of Representatives Financial Services Committee, Congresswoman Maxine Waters (D-CA) and CBC Chairman, Congressman Cedric Richmond (D-LA).
The letter warns President Trump that removing Director Cordray would be unprecedented: “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.”
The letter comes in the aftermath of the PHH v. CFPB appellate decision, in which the United States Court of Appeals for the DC Circuit severed the “for cause” provision of the Dodd-Frank Act and held that the CFPB director could be removed by the President at his discretion. Prior to the decision, the CFPB director could only be removed for cause. Notably, the letter did not reference the PHH decision or its effect on the CFPB. Rather, the letter referenced Humphrey’s Executor v. United States, 295 U.S. 602 (1935), a seminal case decided during the Roosevelt Administration stating, as quoted in the letter, “that ‘illimitable power of removal is not possessed by the President in respect to [independent agency heads].'” The letter asserted, “We write to underscore to you that we are aware of no facts that would support Director Cordray’s removal, even under any of the steepest legal standards.”
The possibility of Director Cordray’s removal was of particular interest to the CBC due to his attempts to “vindicat[e] the rights of minority consumers,” and within the CFPB, “to root out any patterns of invidious discrimination, and to institute effective strategies to combat practices that may have disparate effects on employees of color.” The letter added, “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 letter concluded by affirming the CBC’s position that any removal of Director Cordray prior to his term expiring on July 15, 2018 would be viewed “as an illegitimate abuse of power.” Whether President Trump will act on his threats to remove Director Cordray, and what effect, if any, the CBC’s letter will have on his decision, remains to be seen. We will continue to monitor developments as they unfold.