Democrats Defend CFPB Chief as Republicans Call for His Dismissal

Key congressional Democrats are pushing back on GOP lawmakers who are saying Consumer Financial Protection Bureau Director Richard Cordray should be fired.

Rep. Maxine Waters of California, the top Democrat on the House Financial Services Committee, and 20 Democratic panel members sent a letter Tuesday to President-elect Donald Trump a day after Sens. Ben Sasse (R-Neb.) and Mike Lee (R-Utah) called on the incoming administration to dismiss Cordray.

Separately, Senate Banking Committee ranking member Sherrod Brown (D-Ohio) issued a statement Tuesday defending Cordray’s leadership at the CFPB, which was established by the 2010 Dodd-Frank financial law. Conservative organizations such as the Heritage Foundation have called for the CFPB to be abolished, an idea that’s supported by lawmakers like Sen. Ted Cruz (R-Texas).

Brown said that during Cordray’s tenure the agency has returned $12 billion to Americans who have been “ripped off by shady debt collectors, for-profit schools, payday lenders, and huge banks like Wells Fargo.”

“Firing Cordray and abolishing the consumer bureau so the special interests can get their $12 billion back would shatter President-elect Trump’s promise to hold Wall Street accountable and protect working people,” Brown added.

The House Democrats’ letter was similarly scolding. “‎While we understand that many powerful special interests would like to see Director Cordray leave, we urge you not to bow to their demands to initiate costly, meritless litigation, and we stand ready to oppose any efforts you may make to do so,” the lawmakers wrote.

Cordray is in the crosshairs of political tensions over the future of the CFPB. Republicans, who have long clamored to scale back the agency’s regulatory power, are pushing to replace Cordray’s position with a bipartisan board. Democrats such as Sen. Elizabeth Warren (Mass.), a key architect of the consumer agency, consider the CFPB a crucial watchdog rather than an example of regulatory overreach.

Under a GOP president, and in the wake of an October court ruling that allows a president to fire the CFPB director at will, Republicans have an opportunity to make significant changes to the agency. The CFPB has asked the U.S. Court of Appeals for the District of Columbia Circuit for an en banc rehearing of the case, and the Justice Department filed a December brief in support of its request.

Democratic members of the House Financial Services Committee said that firing Cordray would be an unprecedented move. “We caution you not to engage in partisan litigation, particularly since it is likely to be unsuccessful and will needlessly divert government resources away from other important priorities,” the lawmakers wrote.

They also praised the CFPB’s September enforcement action against Wells Fargo & Co.’s consumer fraud scandal, as well as pending agency rules on payday lending and mandatory arbitration agreements.

Democrats warned that they would view Trump’s firing of Cordray as the White House interfering with protections in those areas. “Any attempt to dismiss Director Cordray from his position at the Bureau should be seen as an effort to delay or otherwise thwart its important work to protect consumers,” they wrote.


Finance Brief: Intra-Party Debate Over Swipe Fees Intensifies

An intra-party dispute over a proposed repeal of debit card swipe-fee limits may delay a House vote on the the Dodd-Frank replacement bill sponsored by Financial Services Committee Chairman Jeb Hensarling (R-Texas), who urged colleagues to support the measure during a conference meeting Tuesday. GOP Reps. David Young (Iowa) and Dennis Ross (Fla.) want the repeal language removed from the bill.

Finance Brief: Week in Review & What’s Ahead

Treasury Secretary Steven Mnuchin told lawmakers that the Trump administration does not support reinstating the firewall between investment and commercial banking required under the Depression-era Glass-Steagall Act, clarifying previous remarks from White House officials that indicated a preference for reinstating the law that was repealed in 1999.

Load More