Just as the United States Supreme Court prepares to hear oral arguments on the constitutionality of the Consumer Financial Protection Bureau (CFPB)’s single director structure, the Bureau’s inaugural director reveals that he believed he was nearly fired by President Donald Trump in a phone call which ended abruptly. This is according to a story in National Mortgage News, based on information Cordray reveals in his new book.
In “Watchdog: How Protecting Consumers Can Save Our Families, Our Economy, and Our Democracy” releasing on Monday, Cordray relates receiving news of an unscheduled call with the president in November 2017.
“I received an unscheduled call from the White House, and a secretary asked me to hold to speak with the president, but then the call was abruptly terminated,” Cordray writes in the book. Cordray believes that the call’s intent was to fire him from his post, he says.
Cordray also details in the book that the early days of the CFPB were fraught with tensions between the Bureau and Republican lawmakers who expressed doubt about the Bureau’s mission, as well as detailing conflicts with other regulating agencies and notable scandals that broke out during his tenure as the CFPB director, the story says.
The idea that the president potentially wanted to fire Cordray is seen in a new light considering the upcoming Supreme Court decision, since a core contention of the case – Seila Law v. CFPB – is that the single director structure of the Bureau makes it inordinately difficult for a president to remove a CFPB director due to protections for the position codified in the Dodd-Frank Act, the law which helped give birth to the CFPB.
“The threat that I would be fired as soon as President Trump took office loomed over everything,” Cordray writes in the book.
The book also reveals that as the Obama Administration was preparing to transition out of office, Cordray took steps to prepare a legal challenge to any attempts to oppose or disassemble the CFPB since the incoming administration was believed to be more hostile to the Bureau’s existence when compared with the Obama Administration.
“It made sense to prepare a lawsuit to contest a firing,” Cordray says in the book. “We didn’t know on what grounds a firing would occur, so we had to plan for all contingencies.”
Cordray even apparently asked President Obama himself to draft a letter attesting to Cordray’s fitness to continue serving as CFPB director, an additional layer of protection should President Trump attempt to fire him.
“Recognizing that a court might defer to President Trump’s judgment of my fitness for office, we also requested and secured a letter from President Obama, while he was still in office, attesting to my fitness and praising our good work for consumers,” Cordray details. “If the sitting president’s viewpoint were deemed to be authoritative, then at least there would be dueling perspectives to present to the court.”
Cordray also related his perspective that former White House Chief of Staff John Kelly may have intervened to end the unscheduled call with President Trump prematurely.
“[John] Kelly apparently intervened at that point, and I never heard anything further,” Cordray writes. “I knew why the White House had called, but once again I had dodged the bullet.”
Cordray took additional precautionary steps should the attempt to remove him from office come from the new president, hiring an attorney to defend himself on the basis of Dodd-Frank’s provision defining the only circumstances by which a CFPB director can be removed from office by a sitting president.
Cordray also details in the book that powerful financial interests constantly sought ways to limit the enforcement authority of the Bureau.
”Financial interests saw that if they could get me fired — or use the threat of firing me to cow us into inaction — then they might finally succeed in defanging the CFPB,” he says in the book.
The Supreme Court is scheduled to hear oral arguments in Seila Law v. CFPB later this week. Most recently, the Department of Justice filed a brief with the Court which defended the role of the CFPB in consumer protection, while incumbent CFPB Director Kathleen Kraninger previously agreed with the Trump Administration’s contention that her own job security is unconstitutional.
Read the story at National Mortgage News.
