Politico has reported that CFPB Communications Director Jen Howard has indicated in an e-mail that Director Cordray has no current plans to leave the CFPB. According to Politico, Ms. Howard stated “Director Cordray was confirmed by a bipartisan group of 66 senators to serve a term until July 2018 and has no plans to step down.”
In PHH, the D.C. Circuit ruled that that the CFPB’s single-director-removable-only-for-cause structure is unconstitutional. To remedy the constitutional defect, the court severed the removal-only-for-cause provision from the Dodd-Frank Act so that the President “now has the power to supervise and direct the Director of the CFPB, and may remove the Director at will at any time.” The decision has not become effective because the D.C. Circuit issued an order directing the Clerk of the Court of Appeals to “withhold issuance of the mandate herein until seven days after disposition of any timely petition for rehearing or petition for rehearing en banc.”
We recently blogged about the view of an Associate Professor of Law at the University of Virginia School of Law that challenges the assumption that the new President would have to let the PHH litigation run its course before acting to remove Director Cordray without cause. In his blog post, Professor Bamzai asserted that the new President could remove Director Cordray before the appeal is resolved and any judgment becomes effective if the Executive Branch determines that the statutory “for cause” restriction on removal is unconstitutional. He also asserted that Director Cordray could not insist that he be allowed to remain in office following a presidential order to vacate it. Alternatively, the new President could seek to remove Director Cordray “for cause” or Congress could pass legislation to create a five-member commission to run the CFPB.