There is only one year left in Consumer Financial Protection Bureau Director Richard Cordray’s term at the helm of the No. 1 consumer watchdog agency.
But this still leaves 365 days for someone, or some event, to oust him from the position.
There’s already a target on Cordray’s back by key industry players who are fighting to have him fired from the position. And, word is, Cordray is not the kind of person who quits so he isn't expected to resign.
So as the countdown until July 2018 starts, here are the key situations at play that could put a major roadblock in Cordray serving his full term.
1. PHH/CFPB court case
The industry is eagerly awaiting a decision from judges in the landmark PHH/CFPB case that’s trying to rewrite how leadership at the CFPB works.
In May of this year, the full Court of Appeals agreed to rehear the court's first ruling that declared the CFPB’s leadership structure unconstitutional, ruling that CFPB’s current structure allows the director to wield far too much power, more than any other agency in the government.
Under the CFPB’s current structure, the director serves a five-year term and may only be terminated by the president for “inefficiency, neglect of duty, or malfeasance in office.”
Even the Department of Justice decided to jump in on the case and filed an amicus brief in March, asking the court to rule the CFPB’s leadership structure unconstitutional and grant the president the authority to fire the CFPB director at will.
Now, in the most recent development in the case, the U.S. Court of Appeals for the D.C. Circuit held oral arguments back in May. According to a blog from Ari Karen with Offit Kurman, the initial pulse of the case looked like more judges were siding with the CFPB than PHH, which would leave the structure of the CFPB intact. But a final ruling is still not out and no one knows the exact timing of when it will be announced, with some guessing that one will come this fall.
As a result, if the CFPB wins, Cordray will be able to finish out his term until July. However, if case doesn’t end there and makes it way to the U.S. Supreme Court, the likelihood of it being complete before July 2018 is not high, allowing Cordray to still serve his full term.
2. Abolishing Dodd-Frank
The Financial CHOICE Act, H.R. 10, which is spearheaded by House Finance Services Chairman Jeb Hensarling, R-Texas, is officially on its way to the Senate for a vote. The act passed through the Financial Services Committee in May in a completely partisan vote (34-26). If it passes though Senate and is signed by President Donald Trump before July 2018, it would put Cordray out of a job, and in fact, it would get rid of the CFPB all together.
The act is currently the leading option to replace the Dodd-Frank Wall Street Reform and Consumer Protection Act, which established the CFPB after the 2008 financial crisis. But it’s not likely that the Financial CHOICE Act will pass through Senate in one piece. A big reason behind this is that it has failed to reach any bipartisan support.
A bill of this magnitude would need a filibuster-proof vote in the Senate, which is 60 votes or more, meaning Senate Democrats will need to flip sides and vote to support the act.
Given these current conditions, Cordray would be able to make it his full term.
3. Ohio governor
This option is different than the others in that it requires Cordray to elect to step down on his own rather than be forced.
Rumors have been spreading all over Washington D.C. that Cordray will choose to run for Ohio Governor, where he was previously state attorney general from 2009 to 2011, here is his interview with HousingWire from that time.
Even the president himself seems convinced that Cordray will announce he is leaving the bureau and running for Ohio governor soon. On top of this, Hensarling has stated before that he is surprised Cordray has yet to announce his bid for Ohio governor.
So far, Cordray, to no surprise, hasn’t commented on the rumor.
But he still has time to decide, and if he does choose to run, he would be required to leave the bureau. Under Ohio law, Cordray can’t run for Ohio governor if he is currently engaged in politics, as an article in Cleveland.com by Andrew Tobias explained, meaning he has to put in his resignation as the leader of the CFPB.
Technically, the deadline for candidates to file their petitions for the 2018 Ohio Governor Primary is Feb. 7, 2018. However, a recent Bloomberg article explained that ideally Cordray would need to enter the race by the end of summer, well ahead of the Ohio filing deadline, but nearly a year before his CFPB appointment ends.
In the meantime, local Ohio publications haven’t taken the possibility of Cordray running out of the mix.
4. President Trump fires Cordray
As noted before, the only current way to oust Cordray is for President Trump to fire him for “inefficiency, neglect of duty, or malfeasance in office.”
But looking back at the third option, since Trump is convinced that Cordray will run for governor and elect to leave on his own, he has held off on firing him.
In the case that none of the options above happens or are possibly delayed a bit, it still puts the timeline extremely close to July 2018.
So in the end, what would the point be in firing him versus calmly letting him fulfill his full term?