President-elect Trump will face a major legal battle if he tries to fire Consumer Financial Protection Bureau Director Richard Cordray after taking office this week, top Senate Democrats warned Tuesday.
“There would be a real battle in courts,” said Sen. Elizabeth Warren, D-Mass., who thought of the idea of the consumer agency. “This is not something that he simply has the right to say ‘you’re fired’ and then cut to commercial.”
Speaking to reporters on a press call, Democrats said Trump would face bad press and an inevitable legal challenge if he tried to remove Cordray.
Unlike other Obama appointees to independent agencies, Cordray has not indicated that he will leave his post as Trump takes office. His term runs into 2018.
Expectation that Trump would try to fire Cordray increased last week after former Texas Rep. Randy Neugebauer, a top congressional critic of the bureau during his time in office, visited Trump Tower, prompting speculation that Neugebauer would be Trump’s choice to replace Cordray. Some congressional Republicans have pre-emptively called on Trump to fire Cordray.
At stake, Warren said, are three major rules that the bureau has yet to finalize. Those are regulations on payday lenders, rules prohibiting financial contracts that rule out the possibility of class-action suits, and new limits on debt collection.
Under the Dodd-Frank law that created the bureau, its director can only be fired for cause. In October, a federal court ruled that the president should have the authority to fire the director at will, but that decision is stayed pending an appeal.
Senate Minority Leader Chuck Schumer said Tuesday that there was no “conceivable” charge against Cordray, adding that any such case against him would be on “trumped-up” claims.
Republicans have charged that the bureau is too powerful and unnaccountable, with one person able to set rules across activities and industries. They have also said that its rules raise borrowing costs and constrict access to credit.
