Well, it’s that time of year again.
On Wednesday, Richard Cordray, the director of the Consumer Financial Protection Bureau, appeared before the House Financial Services Committee for his twice-a-year Molotov cocktail of compliments and insults from the committee’s Democrats and Republicans.
And never one to shy away from a chance to batter the CFPB, House Financial Services Committee Chairman Rep. Jeb Hensarling, R-Texas, didn’t disappoint on Wednesday.
Hensarling was at his passive-aggressive best during his opening statement, poking at Cordray’s rumored political aspirations and telling Cordray, to his face, that he deserves to be fired by President Donald Trump.
“Mr. Cordray, I know that you are here at our committee’s invitation for a statutory appearance, but I’m otherwise surprised to see you here in that, as you well know, there have been many press reports saying that you would have otherwise returned to Ohio to pursue a gubernatorial bid,” Hensarling began.
Hensarling is referencing some recent reports from Ohio that have Cordray returning to the state to run for governor if he is removed from his post at the CFPB.
“Perhaps the rumors of your political aspirations are greatly exaggerated,” Hensarling continued.
Hensarling then noted the president’s ability to fire Cordray, either at will or for cause.
Recently, the United States Court of Appeals for the District of Columbia Circuit declared the leadership structure of the CFPB to be unconstitutional as part of a landmark ruling in the PHH Corporation vs. Consumer Financial Protection Bureau case. That ruling makes Cordray fireable at will, rather than for cause.
But the ruling is currently under review, as the full Court of Appeals recently agreed to rehear the case, granting the CFPB the opportunity to defend itself.
Although it will do so without the support of the rest of the government, as the Trump administration recently switched sides in the PHH case, asking the court to rule the CFPB’s leadership structure unconstitutional and grant Trump the authority to fire the CFPB director at will.
Whatever the results of that case are, Hensarling feels Cordray deserves to be fired, and told him so, repeatedly.
“On the other hand, I am also surprised that you are here because, as you are well aware, the President under the PHH case can dismiss you at will. Under Dodd-Frank, you can be removed for cause,” Hensarling said. “Either way, I believe the President is clearly justified in dismissing you and I call upon the President – yet again – to do just that, and to do it immediately.”
This isn’t the first time that Hensarling has called for Cordray’s head. In fact, it’s a frequent refrain.
But on Wednesday, Hensarling laid out his case for Cordray’s dismissal directly to Cordray, turning his speech into a prosecutor’s closing argument with Cordray positioned as the defendant on trial.
“There is no greater form of consumer protection than fostering competitive, innovative and transparent markets and then vigorously policing them for fraud, theft and deception,” Hensarling said.
“In policing our markets, under Mr. Cordray’s leadership, CFPB’s success record is anything but clear. What is clear, though, is that under Mr. Cordray’s leadership the CFPB has shown an utter disregard for protecting markets and has made credit more expensive and less available in many instances; this is particularly true for low and moderate income Americans,” Hensarling continued. “What is also clear is that under Mr. Cordray’s leadership, the CFPB has acted unlawfully, routinely denied market participants due process and abused its powers.”
In Hensarling’s view, the CFPB has done much more harm than good, and for that, Cordray deserves the boot.
“For all the harm inflicted upon consumers, Richard Cordray should be dismissed by the President,” Hensarling said.
Hensarling also suggested that Cordray exceeded his statutory authority in the PHH case, which stemmed from Cordray tacking a $103 million increase onto a $6 million fine initially levied against PHH for allegedly illegally referring consumers to mortgage insurers in exchange for kickbacks.
That issue is at the heart of the PHH case, and the full Court of Appeals is yet to rule on it. But in Hensarling’s mind, Cordray clearly went far beyond what he is allowed to do under the law.
“For conducting unlawful activities, abusing his authority and denying market participants due process, Richard Cordray should be dismissed by our President,” Hensarling said.
And according to Hensarling, Cordray isn’t the only problem; it’s also the CFPB as currently structured.
“Not only must Mr. Cordray go, but this current CFPB must go as well,” Hensarling said.
“American consumers need competitive markets and a ‘cop on the beat’ to protect them from fraud and deception. They don’t need Washington elites trampling on their freedom of choice and picking their financial products for them,” Hensarling continued.
“Today, Mr. Cordray and his CFPB don’t just act as a cop on the beat, they act as legislator, prosecutor, judge and jury all rolled into one,” Hensarling said. “The CFPB represents the summit of unelected, unaccountable and unconstitutional agency government. It represents a dagger aimed at the heart of our foundational principles, namely co-equal branches of government, checks and balances, due process and justice for all.”
Hensarling closed his speech by again comparing the CFPB to a tyranny, a parallel he drew recently.
“Clearly you can be a Democrat – upper case D – and believe in the CFPB, but you cannot be a democrat – lower case D – and believe in this institution,” Hensarling said.
“Thus, this debate has import way beyond the fate of fines, credit cards and mortgage access. It represents nothing less than one of the key battles to defend and protect our Constitution,” Hensarling added.
“As James Madison wrote in Federalist 47, ‘the combination of all power, legislative, executive and judiciary…may justly be pronounced the very definition of tyranny,’” Hensarling concluded. “This tyranny must end and the people’s constitutional rights returned to them.”
To see Hensarling’s speech in full, check out the video below. And stay tuned to HousingWire for more coverage of Cordray’s time on Capitol Hill.
— Financial Services (@FinancialCmte) April 5, 2017