The Dodd-Frank Wall Street Reform and Consumer Protection Act created the Consumer Financial Protection Bureau. Naturally, an agency designed and built to supposedly protect consumers sounds good in theory and on paper. Unfortunately, the CFPB operates more like a rogue agency, accountable to nobody and with a sole person in charge, Director Richard Cordray.

Republicans have long wanted Cordray dismissed as director of the agency, and argue President Trump is within his rights to terminate him at will. Previously, the president would be hindered by the Dodd-Frank legislation as it said Cordray could only be fired for inefficiency, neglect of duty, or malfeasance in office. Any termination could be subject to review and Cordray could file suit for wrongful termination. However, in October 2016, the D.C. Circuit Court ruled the statute is partially unconstitutional, saying the president does have the authority to fire the director of the CFPB at will. The CFPB appealed the decision, but while the case is pending, there is no recourse for Cordray if Trump decided to fire him.

That said, Cordray currently flies under the radar, ruler of his little kingdom that he operates with impunity with little oversight and hardly any accountability. One example of the CFPB's roguelike fashion was choosing to ignore the explicit exemption auto lenders have under Dodd-Frank, choosing instead to go after the lenders anyway. The CFPB believed auto lenders were charging higher interest rates for black applicants as opposed to white applicants. However, it is illegal for lenders to ask about race on applications, forcing the CFPB to guess the race of customers by using their last names and addresses to make their case. The CFPB admitted their process had a likely error rate of at least 20 percent and still chose to sue lenders for discrimination.

In November 2015, Politico showed how the CFPB worked hand-in-hand with a consumer non-profit organization to draft regulations for payday lending that would put nearly 70 percent of the entire industry out of business, violating long-standing norms for such agencies to operate independently.

Also, the agency took long-standing Housing and Urban Development regulation under the Real Estate Settlement Procedures Act against mortgage lender PHH Corporation. It is an interpretation of a provision that allows what is known as captive reinsurance arrangements to exist just as long as the reinsurance is later purchased at market prices. The CFPB reinterpreted the rule, determined there was no statute of limitation and imposed a $109 million penalty on PHH current and for past conduct. This action was the basis for the lawsuit challenging the agency's existence.

Republicans also charged Cordray, and the CFPB ignored subpoena requests and found Cordray didn't even know the agency he runs was under review by the Federal Reserve Inspector General's office for alleged minority discrimination.

The one question that remains is: Why hasn't Trump fired Cordray and replaced him with somebody that's more agreeable to the free market and business?

Two theories are plausible:

  1. It is no secret Cordray wants to run for governor of Ohio in 2018. The thinking may be that Cordray is using that as a stepping stone to run for president in 2020.

  2. The other theory is Trump is so distracted from the Russia investigations and his Twitter spats to focus on the important promises he made to supporters during his campaign.

Trump can and should act now. If the court rules in favor of Cordray, Trump will have less authority to terminate him, and the country could be stuck with an autocrat heading up an agency that defines what is to be part of the swamp in Washington.

Jay Caruso (@JayCaruso) is a contributor to the Washington Examiner's Beltway Confidential blog. He is the assistant managing editor at RedState, as well as a contributor to National Review and The Atlantic.

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