The Consumer Financial Protection Bureau and embattled director Richard Cordray won a second chance to defend his independence from the political pressure of being fired at any time for any, or no, reason by President Donald Trump.
(Related on ThinkAdvisor: Trump Must Fire CFPB’s Cordray: Republican Senators)
A U.S. appeals court in Washington on Thursday granted the CFPB’s request to reconsider an October decision that stripped Cordray of his job protection, which left him at the mercy of Trump and a pro-business Republican-led Congress looking to rescind financial regulations put in place by the Obama administration after the 2008 fiscal crisis.
(Related on ThinkAdvisor: Court Rules CFPB Is Unconstitutional, but Not Out of Business)
The do-over comes as the new president vows to repeal 75 percent of all U.S. regulations, adding to a pre-election promise to dismantle the 2010 Dodd-Frank financial reform legislation under which the CFPB was created. It also arrives amid mounting legal challenges to Cordray’s authority and that of the bureau, which was created to shield ordinary citizens from financial industry predation.
In the earlier ruling by a three-judge panel, the appeals court wiped out $109 million in penalties imposed on a New Jersey-based mortgage company that the CFPB said had violated federal real-estate transaction rules. Two of the judges then went a step further, deciding that Cordray’s solitary leadership of the agency and his insulation from being fired for anything but cause endowed him with too much power and not enough accountability.
While the panel stopped short of granting the company’s request to strike down the bureau itself, reopening the case puts that issue back in play.
A CFPB spokesman declined to comment. Ted Olson, the attorney who argued the case for the mortgage company, PHH Corp., was unavailable for comment immediately after the ruling. Helgi Walker, also a partner in the Washington office of Gibson Dunn & Crutcher LLP, didn’t immediately reply to a telephone message seeking comment.