Trump Asks DC Circ. For Power To Fire CFPB Chief

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"While we do not agree with all of the reasoning in the panel's opinion, the United States agrees with the panel's conclusion that single-headed agencies are meaningfully different", reads the brief, written by acting Assistant Attorney General Chad Readler and Justice Department appellate division staff.

The Department of Justice has filed a court motion to weaken the Consumer Financial Protection Bureau, an agency formed after the 2008 banking crisis, claiming the agency's structure is unconstitutional. Under the 2010 Dodd-Frank Wall Street reform law that created the CFPB to protect individuals against fraud in lending, the president can only fire the agency director for cause. But Trump has been open about his desire to replace him with someone who would presumably be more favorable to the president's policy.

In the six years since its creation, the CFPB contends, it has fulfilled that mandate.

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The Consumer Financial Protection Bureau has taken enforcement actions against many financial companies, angering the industry and Republican lawmakers, who accuse it of overreaching its authority. The CFPB says that over five years it has recovered $11.7 billion that it returned to more than 27 million harmed consumers.

At issue in this case is the CFPB's autonomy, specifically the power of its director. Now the head of the CFPB can only be removed in cases of "inefficiency, neglect of duty or malfeasance in office", as stated in the Dodd-Frank Act. The case was brought by PHH Corp., which the agency had penalized for referring customers to mortgage insurance companies in exchange for kickbacks.

But the panel didn't rule that the agency must be dissolved, or that CFPB Director Richard Cordray must be fired.

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In the lawsuit, PHH argues that the CFPB's structure gives it too much power.

"A single-headed independent agency presents a greater risk than a multi-member independent commission of taking actions or adopting policies inconsistent with the President's executive policy", the Justice Department argued, saying a commission must compromise, while a single director does not answer to anyone. But the CFPB will be fighting that battle without the backing of the DOJ. Cordray's term does not expire until July 2018. The judges who struck down the bureau structure as unconstitutional were Republican appointees, whereas the DC appeals court was largely appointed by Democrats.

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