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Don’t sleep on non-QM products

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Politics & MoneyMortgage

HereÕ the easiest way for Trump to fire CFPB Director Cordray

Would only need to issue one order

The battle remains hot for the job of Consumer Financial Protection Bureau Director Richard Cordray, and President Donald Trump may have a very simple way to fire him.

And calls to fire Cordray only strengthened after Trump signed an executive order last Friday to roll back the Dodd-Frank Wall Street Reform Act.

The problem is, Trump can fire the CFPB director for cause, but he seems unlikely to go quietly, causing some of the president’s advisors to say it might be easier to live with Cordray until his term expires in July 2018, according to an article by Thomas Boyd, former U.S. assistant attorney general, for The Wall Street Journal.

Back in October 2016, PHH won a landmark victory against the CFPB after the United States Court of Appeals for the District of Columbia Circuit shockingly handed an earth-shattering victory to PHH, declaring the CFPB’s leadership structure unconstitutional and vacating a $103 million fine against PHH.

The move quickly escalated the viability of Corday getting kicked out office, following continuous talks from the House Financial Services Committee on the lack of accountability at the bureau.

The CFPB, however, isn’t going down without a fight. Shortly thereafter in November 2015, the CFPB filed for an en banc review with the D.C. Court of Appeals, meaning that it wants the entire court to hear the case, rather than the three judges who ruled on the case in October.

If the CFPB wins the appeals case, the president would not be able to fire the director at-will, and would need a cause. If the agency loses the case, however, the director would answer directly to the president.

But there is a way for Trump to easily fire Cordray, and he would only need to issue one order, according to the article from WSJ. Trump could order Cordray to withdraw the appeal.

From the article:

The Constitution vests all executive authority in the president. There is no fourth branch of government to house truly “independent” agencies. If the president were to instruct Mr. Cordray to abandon his appeal, that order would seem to be perfectly appropriate—and constitutional. Moreover, the Dodd-Frank Act specifically requires that the CFPB coordinate with the Justice Department on litigation. The bureau must also seek the attorney general’s consent before representing itself before the Supreme Court.

Ordering Mr. Cordray to drop the appeal would put him in a quandary. If he complies, the opinion from last fall becomes law, and he may be fired “at will.” If he refuses, then he may be fired for directly challenging a presidential order.

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