CFPB, Cordray Win Second Chance to Avoid a Trump Firing

Uncertain Future

The director's future has been uncertain ever since Trump's surprise win in November. Republicans have repeatedly called on the president to dismiss him and Trump could still try to find grounds to fire Cordray for cause. Lawmakers are also considering legislation that would change the CFPB's leadership from a single director to a five-person commission or shift the bureau's funding source from the Federal Reserve to Congress, enabling them to starve it of money.

The court will hear the re-argument on May 24, including the trio that initially heard the case in April and Chief Judge Merrick B. Garland who is again participating in cases after stepping back while his Supreme Court nomination was pending.

While the case pressed by the Mount Laurel, New Jersey-based PHH Corp. had drawn backing of the U.S. Chamber of Commerce, Competitive Enterprise Institute, National Association of Realtors and other groups prior to the initial court ruling, the outcome spurred pushback from those who support the bureau's mission. Sixteen states' attorneys general, all Democrats led by Connecticut's George Jepsen, on Jan. 23 petitioned the court for permission to intervene. Three days later, the ranking Democratic Party members of the U.S. Senate Banking and House of Representatives Financial Services committees sought to do the same, giving the agency another layer of advocacy if the Trump administration abandons its defense.

Also weighing in on behalf of the CFPB are Americans for Financial Reform, the Consumer Federation of America, the U.S. Public Interest Research Group and one of the bureau's biggest proponents, Democratic Senator Elizabeth Warren of Massachusetts.

The three-judge panel had found the CFPB was "unconstitutionally structured." The agency had punished PHH for referring customers to insurers who then purchased reinsurance from a PHH subsidiary. CFPB determined those payments were part of an illegal kickback scheme.

The  case is PHH Corp. v. Consumer Financial Protection Bureau, 15-1177, U.S. Court of Appeals, District of Columbia Circuit (Washington).

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• Hensarling to Trump: Fire Cordray Now 
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• Wells Fargo Fined $185M for Opening Secret Unauthorized Accounts